Indian citizens traveling to Sri Lanka need to apply for visa. However, it is pretty easy to obtain one online. ETA (Electronic travel authorization) can be obtained online at:
1. http://www.eta.gov.lk/slvisa/visainfo/fees.jsp for $15
2. Sri Lanka Overseas mission for $15
3. On arrival at the port of entry for $20
Once you apply for ETA you will be provided with single entry for 30 days of stay. I was very amazed with the speed with which my ETA was approved within 30 minutes of applying. I traveled to Sri Lanka in December 2013. Sri Lanka allows two days of single entry transit visa for free. Renewal of tourist visa beyond 30 days is possible for 2 months. Any further extension will require valid reason. However, one can depart and come back again. Children under 12 years are exempted from ETA.
I found citizens of Singapore, Maldives and Seychelles are exempted from ETA for a travel period of 30 days. This is on a reciprocal basis between Sri Lanka and those countries.
Sri Lanka is a beautiful country. It has sea, hills, forest and a world of its own. People are friendly and the country is much more efficient than we think from outside.