They also shared their concern on the falling global economic growth and increased risks to the global outlook while welcoming the strengthening of business ties between the two nations, a joint statement said.
The two prime ministers at their meeting agreed to continue working together towards strong, sustainable and balanced growth and to strengthen the economic relationship by deepening bilateral trade and investments.
Indian Finance Minister Arun Jaitley and Chancellor of the Exchequer George Osborne would drive this forward in their forthcoming economic and financial dialogue.
The two prime ministers also agreed on the importance of structural reforms and pursuing credible fiscal policies in order to raise the living standards of their people.
India invests more in Britain than in the rest of the European Union combined. On the other hand, Britain is the largest G20 investor in India.
The two countries underlined the importance of the IT and digital industries in both countries, and the contribution they make to strengthen trade ties between Britain and India.
Both sides reaffirmed their commitment to work together to reinforce trade in goods and services in this area.
India and Britain agreed to facilitate the temporary movement of skilled personnel in accordance with applicable international commitments.
The two prime ministers said London should play an important role in channelling investment into infrastructure projects in India, including in the railways sector.
They welcomed the announcements by HDFC, Bharti Airtel, State Bank of India and Yes Bank to raise finance through the City of London which also opens up the opportunity for the Indian private sector to raise capital.
Modi and Cameron welcomed the collaboration by the India-UK Financial Partnership led by key industry figures on both sides and the creation of a new Chevening Financial Services course, sponsored by Standard Chartered, aimed at mid-career professionals wanting to study in Britain.
They also welcomed the initiative taken to launch the first-ever exchange programme between the economic services of the two countries to support economic policy making.
They recognised that India and Britain were thought leaders on development, and agreed to elevate the official-level development talks to a Biennial Ministerial dialogue on Development.
The two prime ministers recognised the importance of infrastructure for sustainable development and launched India's first Low Income State Infrastructure Equity Partnership with co-investment from the UK Department of International Development and the State Bank of India.
This aims to provide equity partnerships for small infrastructure development in sectors like water and sanitation, clean energy and urban infrastructure.
Modi noted the partnership of Britain and India in efforts to improve the ease of doing business.
They announced a new Ease of Doing Business Partnership including several different strands of work to promote greater investments.
The two prime ministers welcomed the first meeting of the reconstituted India-UK CEOs Forum. The forum will be tasked with advising the two leaders about the trade and investment opportunities and challenges.