In a media statement following talks with Uzbek President Islam Karimov, Modi said both countries will also seek to work in the framework of the Shanghai Cooperation Organisation (SCO).
"I share President Karimov's desire to raise the level of our economic engagement. I conveyed to him that there is a strong interest in Indian business to invest in Uzbekistan. I have urged him to make the process and the policies for Indian investments here smoother. The president responded positively to my suggestion," he said.
He said the Uzbek president was supportive of strengthening ongoing cooperation in agriculture, information technology and energy.
"We also discussed steps needed to implement the contract for supply of uranium from Uzbekistan signed earlier," said Modi.
"President Karimov and I discussed various initiatives to further enhance connectivity between India and Uzbekistan," he added.
Modi also said he proposed to Karimov that Uzbekistan become a member of the International North South Transport Corridor that seeks to connect Mumbai with St. Petersburg in Russia.
"We also discussed regional and international issues, including the situation in Afghanistan. We also have shared concerns on the rising threat of extremism and terrorism in our extended neighbourhood," he said.
"I have begun my journey in Uzbekistan underlining its importance for India, not just in this region, but also in Asia," he said.
He said he would be visiting the memorial of former Indian prime minister Lal Bahadur Shastri on Tuesday and thanked Uzbekistan for "preserving the legacy of our former prime minister".
He said his visit and talks were "very rewarding" and would lay the foundation for a "rich harvest in years ahead".
Earlier, the two sides inked agreements for furthering cooperation between their foreign offices and in the fields of culture and tourism.
Modi, who arrived earlier on Monday, was accorded a ceremonial welcome at the Kuksaroy presidential complex.