The meeting with Karzai followed Modi's talks with Maldivian President Abdulla Yameen Abdul Gayoom at the ceremonial Hyderabad House here.
In their more than half an hour meeting, Modi and Karzai discussed ways to enhance cooperation in the wake of NATO combat troops withdrawal from the war-torn country.
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Modi was assisted in the talks by External Affairs Minister Sushma Swaraj and Foreign Secretary Sujatha Singh among others.
Both Karzai and Gayoom arrived yesterday along with other SAARC heads of government and states to attend Modi's swearing-in ceremony at Rashtrapati Bhavan.
These two meetings will be followed by other bilateral including talks with Pakistan Prime Minister Nawaz Sharif and Sri Lankan President Mahinda Rajapaksa.