China's Ambassador to India Luo Zhaohui said Beijing would reduce or cancel tariffs on imports of 8,549 types of goods from India, South Korea, Bangladesh, Laos and Sri Lanka.

"The goods include chemicals, agricultural & medical products, soybean, clothing, steel & aluminium products," the Ambassador said.

He also described the development as a "good news" that will help reduce trade imbalance.

Sri Lanka is also in the process of exploring the possibility of entering into a Free Trade Agreement (FTA) with China.