The High Commission of India said Defence Secretary of India, Pradeep Kumar, had discussed the projects during a three-day visit to Sri Lanka from 27-29 December 2010.
"The two sides also reviewed major ongoing projects, including reactivation of Palaly airport as a regional civil aviation hub and of Kankesanthurai harbour for regional and domestic trade and commerce.
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Both are in the northern Jaffna peninsula which was badly affected by the island's 30-year ethnic war which ended in May 2009.
Their commercial operations were disrupted by the war but they kept the peninsula connected with the rest of the island when land routes were blocked.
Kumar was accompanied by a delegation of senior officers from the Indian ministries of Defence and External Affairs, as well as from the Indian Army, Navy, Air Force and Coast Guard.
The statement said India and Sri Lanka agreed to strengthen existing defence cooperation links during the talks, especially in the field of training and service