"I am giving lot of emphasis to @makeinindia & want to invite Malaysian companies to come to India. There are lot of opportunities," said a tweet from the Prime Minister's Office, citing Modi.
The "Make in India" initiative aims to make India a manufacturing hub.
Modi met Razak on Wednesday as he began day two of his engagements in the Myanmar capital.
He also said Malaysian companies can help India achieve its aim of providing a home to every Indian.
"Malaysia has worked a lot on affordable housing. We want every Indian to have a home by 2022. Have seen your companies can work in this area," Modi said.
"Malaysia and India have worked together in the past. We can take this much further under your leadership," Modi told Razak.
Modi invited his Malaysian counterpart to visit India.
He also congratulated Razak for "the reform initiatives" he has taken "not just for governance but also for opening the economy".
The Malaysian Prime Minister told Modi that he wanted Indian companies to look at opportunities in Malaysia. He also invited Modi to visit Malaysia.
Modi will be attending the 12th ASEAN-India Summit here Wednesday. He will also meet heads of state and government of several countries on the sidelines of multilateral events.
On Tuesday, Modi held a meeting with Myanmarese President U. Thein Sein and the two sides focused on issues related to connectivity, cultural contacts and commercial ties.
Modi, who is on a three-nation visit, flies to Australia after Myanmar. While returning back home, he will visit Fiji.