The deal provides for equipment and teaching aids from India for setting up 30 language laboratories in each of the island's nine provinces and training to 40 Sri Lankan teachers at the English and Foreign Languages University (EFLU), Hyderabad, India.
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The EFLU will also send experts to the island to help with the training, an Indian High Commission statement said.
It said scholarship and travel documents were given to 40 master trainers who would be traveling for a three month training programme to EFLU, Hyderabad on 18 September, 2011.
Sri Lankan education minister Bandula Gunawardhana said that 80 master trainers trained earlier at EFLU, Hyderabad had been able to train 23,000 teachers in less than two years.
In March 2010, the Sri Lanka - India Centre for English Language Training (SLICELT) was set up in the central hill country town of Peradeniya with the assistance of the government of India.
A digital language laboratory was set up at SLICELT, Peradeniya and training to 80