Sri Lanka continues to be a key part of India's "neighborhood first" policy, India's Ambassador to Sri Lanka Taranjit Singh Sandhu said on Thursday.

Speaking at an event to celebrate the 68th Republic Day of India at the India House in Colombo, Sandhu expressed his hope that Sri Lankan businesses will take advantage of their proximity to the fastest growing major economy in the world, Chinese state - run Xinhua said.

The High Commissioner added that India's total development assistance commitment to Sri Lanka reached around 2.6 billion U.S. dollars, with over 435 million U.S. dollars as outright grants.

The Indian flagship housing project in the northern and eastern provinces of Sri Lanka, aiming to construct 50,000 houses, is proceeding well with over 45,300 houses constructed till date.

The High Commissioner also cautioned against the threat posed by the dark forces of terrorism and stressed the necessity of defeating these forces decisively.

The Consulates General of India in the northern province of Jaffna and the southern town of Hambantota and the Assistant High Commission of India in the Central hills of Kandy also celebrated India's 68th Republic Day by organizing flag hoisting ceremonies on Thursday, the Indian High Commission said.