The agreement was signed after a meeting between the two countries co-chaired by Home Minister Rajnath Singh and Bahrain's Interior Minister Lt General Shaikh Rashid bin Abdulla Al Khalifa here.
After the delegation-level meeting, an agreement on cooperation in combating international terrorism, transnational organised crime and trafficking in illicit, drugs, narcotic and psychotropic substances and precursors chemicals was signed between the two countries, an official release said.
Lt General Khalifa is on an official visit to India from December 1 to December 4 at the invitation of the Home Minister.
Over 4,00,000 Indian nationals work and contribute to the development of Bahrain.
The visit is expected to provide fresh impetus to the bilateral ties, the release said.