The two countries also agreed to expeditiously consider signing an agreement on "combating international terrorism and other crimes".
Prime Minister Narendra Modi, who arrived here last night as part of his eight-day six-nation tour to Central Asia, emphasised the need to combat terrorism and extremism which he described as a threat without borders.
"We both seek a peaceful and secure neighbourhood at a time of challenges in our region. And, we have shared interest in combating extremism and terrorism that has become a threat without borders," he said in a joint press meet along with President Almazbek Atambayev after their talks.
A joint statement released later said both sides "expressed grave concern at the rising trend of extremism, radicalism and terrorism in the region and whole world".
More From This Section
It said the Indian side highly appreciated the steps taken by the Kyrgyz government in combating terrorism and in retaining the secular character of Kyrgyz society.
"The two sides agreed to expeditiously consider signing an agreement on 'combating international terrorism and other crimes'," the statement said.
Noting that the bilateral defence ties are strong, he said a joint exercise Khanjar 2015 has just been completed.
"We have decided to hold joint military exercises on an annual basis," he said.
Modi underlined that the new agreement on defence cooperation would provide a "framework to broaden bilateral engagement" which would also include defence technology.
The defence agreement signed is aimed at deepening bilateral cooperation in defence, security, military education and training.