The talks in India's financial capital of Mumbai marked Starmer's first official trip to India since taking office in July 2024.
The two-day visit that began on Wednesday comes as the Indian government increases efforts to attract global investment for the nation's rapidly expanding economy.
The prime ministers said Thursday's meeting focused on pushing forward a trade agreement signed during Modi's visit to London in July and boosting co-operation in digital infrastructure, technology, defence, critical minerals and education.
The two countries also signed a defence deal that will allow Britain to supply missiles, launchers and electric-powered engines for naval ships to India, the British defence ministry said in a statement.
The countries are natural partners and strengthening the partnership "is an example of stability in an uncertain world", Modi said.
"India-UK partnership is becoming crucial foundation for global stability and economic progress," Modi said, announcing the countries have reached an agreement on military training co-operation, while nine UK universities plan to open campuses in India.
Starmer is visiting India with a 125-member delegation that includes business, university and culture sector leaders.
He said the trip was about "doubling down on the potential of the trade deal" that will drive growth and jobs in both countries.
"We are creating a new, modern partnership focusing on future," Starmer said.
The trade agreement, which both nations said they aim to implement within the next year, will slash tariffs on products including Scotch whisky, English gin shipped to India, and Indian food and spices sent to the UK.
The British government said the deal would raise bilateral trade by a further $US34 billion ($A52 billion) and increase exports to India by nearly 60 per cent.
Modi and Starmer also shared views on Indo-Pacific stability and discussed the war in Ukraine and developments in Gaza.
Starmer hailed the first stage of a peace plan between Israel and Hamas, saying it brings "profound relief", especially for hostages, families and civilians who have suffered over the past two years.
