The tear drop-shaped island is hosting this year's International Indian Film Academy (IIFA) awards, billed as India's Oscars, and pumping in money and resources for a host of Indian stars.
Sri Lanka has just emerged from a bloody war against the Liberation Tigers of Tamil Eelam that killed over 100,000 people and ravaged large parts in the country.
"IIFA is a very good vehicle to help us re-build our image post-war," Dileep Mudadeniya, managing director of the Sri Lanka Tourism Promotion Bureau, told Reuters.
The three-day IIFA celebrations, which has fashion shows and a celebrity cricket match, ends on Saturday with the actual awards night.
"Bollywood and its stars are recognized in this country as well as all over the world, and the kind of media exposure we will get during the event is unprecedented."
The award ceremony has met with some protests by Sri Lanka's ethnic Tamil minority which alleges government mistreatment and criticizes the way it handled the closing stages of a 25-year-long war. Some 300,000 Tamil civilians were displaced by armed conflict, and subsequently detained in government camps, Amnesty International said in a report last month. But organizers say people are trying to put the war behind them and looking forward to rebuilding the nation.
"We are investing as much as $4 million on infrastructure and facilities for IIFA, but these can be used later as well," Mudadeniya said.
"We hope that the event will help us get international exposure, and double the number of Indian tourists who visit Sri Lanka, to 200,000 by the year 2012."
Special trains are carrying passengers from the airport to the city center, while Sri Lankan airlines has hired aircraft with business class seats from Europe especially for the event.
Fans were seen crowding the Cinnamon Grand hotel in the heart of Colombo to catch a glimpse of the Bollywood stars.
"IIFA is an opportunity for us... We have no problems in our country now and are ready to welcome everyone who comes here," Sri Lanka's deputy minister for economic development, Lakshman Yapa Abeywardana, told Reuters.
