The two leaders met in the Kazakh capital, Astana, on the sidelines of the Shanghai Cooperation Organisation (SCO) Summit.
It is the first meeting between the two leaders after India boycotted the high-profile Belt and Road Forum held in Beijing last month in which 29 world leaders took part.
India abstained from the summit to highlight its concerns over the USD 50 billion China-Pakistan Economic Corridor which is part of the Belt and Road Initiative (BRI) and passes through Gilgit and Baltistan in Pakistan-occupied Kashmir.
The Indian side is grateful for China's support for India's accession to the SCO and will work closely with China in the organisation, Modi said.
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On his part, Xi told Modi that the two sides should increase communication and coordination in multilateral affairs and appropriately control and handle disputes and sensitive problems, China's official Xinhua news agency said.
In Beijing, Chinese Foreign Ministry spokesperson Hua Chunying told a media briefing that both the countries "should also address sensitive and major issues" as she highlighted the issues figured in the meeting.
"The two sides should strengthen the complementarities of the development strategies and press ahead with the major cooperation projects such as energy and railways," Hua said.
She also said the two sides should press ahead in a major way on Bangladesh, China, India Myanmar Corridor (BCIM) besides tourism, culture and other relevant fields.
BCIM is part of the China's multi-billion dollar Belt and Road initiative (BRI).
Xi also congratulated India on becoming official member of the SCO, she said.
"We hope that the two counties will work together to ensure the development of the SCO," he told Modi.
Xi said China attaches great importance to its ties with India.
The Chinese president called for more high-level interactions, institutionalised exchanges, strategic communication and policy alignment between the two countries, Xinhua reported.
China and India should also boost trade and investment cooperation and work together for earlier harvest from large- scale cooperation projects in such areas as production capability, industrial parks and railway construction, Xi said.
China is vocal about its stand to block India's admission into the 48-member Nuclear Suppliers Group (NSG). It had also stalled India's move to list Jaish-e-Mohammed chief Masood Azhar as a global terrorist by the UN.
After Astana, Modi and Xi are also expected to cross paths at the G20 summit to be held next month in Hamburg, Germany followed by Brazil, Russia, India, China, South Africa (BRICS) summit to be held in Xiamen, China in September.