He visited the Dograi War Memorial in Khasa in Amritsar and placed wreath at the venue of one of the toughest battles fought and won by Indian forces on September 22, 1965.
Addressing the troops, he said, "I have come to celebrate Diwali wity you. I am happy to get this opportunity.."
Hailing the soldiers, the Prime Minister said, "It is because of your valour, dedication and dreams that the whole world looks at India with respect. It is not only because of the uniform but character of the armed forces."
"I congratulate those who have provided leadership over several years to the armed forces," Modi said.
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His tributes to the "character" of armed forces comes against the backdrop of protests by a section of ex-servicemen over the "dilution" of 'One Rank, One Pension'. Several of the war veterans have returned their medals as part of their protest.
Later, he tweeted, "I spent time with our soldiers and we had a wonderful conversation."
This is the second successive Diwali that Modi spent with troops since becoming the Prime Minister. Last year on Diwali, he had paid a surprise visit to Siachen, the highest battleground in the world, to spend time with the troops.