In his address at the World Sufi Forum here on Thursday, Modi said: "Sufism is the voice of peace, co-existence, compassion, equality and a call to universal brotherhood.
"When we think of 99 names of Allah, no one stands for force and violence. The first two names of Allah are compassionate and merciful. Allah is Rahman and Rahim. Sufism is the celebration of diversity and pluralism.
"Sufis experience universal message of almighty that perfection in human life is reflected in qualities that are dear to God. For the Sufis, service to God meant service to humanity."
Modi also hit out at people who spread terror across the world in the guise of religion.
"Those who spread terror in the name of religion are anti-religious. The fight against terrorism is not a confrontation against any religion. It cannot be," he said.
Extolling the Sufis, he said: "At a time when the dark shadow of violence is becoming longer, you are the noor or the light of hope.
"When young laughter is silenced by guns on the streets, you are the voice that heals."
Invoking Punjabi Sufi poet, humanist and philosopher Bulleh Shah, Modi said: "In wisdom of Bulleh Shah, the lord exists in every heart. His values are the need of our times. This is reality of nature. We learn this wisdom in perfect balance and harmony that exists in vast diversity of our forests."
He also stressed on Sufism's "huge" contribution to poetry in India and "its profound impact" on the development of Indian music.
"You have come from different lands and cultures, but you are united by a common faith.
All are creation of God and that if we love God we must also love all his creations. This is an assembly of those whose lives itself is a message of peace, tolerance and love," said Modi.
"Welcome to a land that is a timeless fountain of peace and an ancient source of traditions and faiths. All our people, Hindus, Muslims, Sikhs, Christians, Jains, Buddhists, Parsis, believers, non-believers, are an integral part of India," he added.