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In a speech at the state dinner hosted by Mongolian Prime Minister Chimed Saikhanbileg at his office residence Ikh Tenger, Modi said, "In space of a day, we have given our ancient relationship new strength and momentum", according to a tweet by external affairs ministry spokesperson Vikas Swarup.
The Mongolian premier, in his speech, said Mongolians "take immense pride in our long historic and cultural bonds with the people of India and entertain profound regard towards India as a sacred land of Lord Buddha".
"We cherish the holy waters of the Ganga river as an elixir and the magnificent Himalaya mountain ranges as the 'Roof of the Earth'. Through the teachings of the Lord Buddha, ancient Indian philosophy, culture and manuscripts has prevailed extensively in the steppes of Mongolia," the premier said.
"Regardless of the geographical distance that separates us, we have been always bound close together with the affinity and mutual warm feelings while attaining stronger bonds of friendly relationship," Saikhanbileg said, according to the text of his speech tweeted by the external affairs ministry.
Earlier, at the community reception at the Buyant Ukhaa Stadium, Modi said: "If I had not visited Mongolia, my tour would have been incomplete. Our traditional and spiritual links run deep."
Modi is on a three-nation tour to China, Mongolia and South Korea.
He praised spiritual guru Ravi Shankar for introducing his Art of Living across the world, including in Mongolia.
Modi, who watched a yoga performance in the stadium, said: "I was seeing the Surya Namaskar. I saw people from all age groups were doing it and spreading the message of Vasudhaiva Kutumbakam."
He said the International Day of Yoga would be observed for the first time on June 21.
Modi had proposed a yoga day during his speech at the UN General Assembly last year, which was adopted by the world body with most countries voting for it.
