Arugam Bay (Tamil: அறுகம் குடா), known locally as "Arugam Kudah", is situated on the Indian Ocean in the dry zone of Sri Lanka's southeast coast, and a historic settlement of the ancient Batticaloa Territory (Mattakallappu Desam). The bay is located 117 kilometres (73 mi) south of Batticaloa, 320 kilometres (200 mi) due east of Colombo, and approximately 4 kilometres (2.5 mi) south of the market town of Pottuvil. The main settlement in the area, known locally as Ullae, is predominantly Muslim, however there is a significant Sri Lankan Tamil and Sinhala population to the south of the village, as well as a number of international expatriates, largely from Europe and Australia. While traditionally fishing has dominated the local economy, tourism has grown rapidly in the area in recent years.