A joint statement said the two leaders had also emphasised the urgency of establishing more flight connectivity and urged the airlines of both countries to start flights between other major cities of the two countries.
PM Modi is in Jakarta, his first stop in the three-nation visit to maritime neighbours - Indonesia, Malaysia and Singapore - to enhance relations and engagements.
PM Modi and President Widodo welcomed the establishment of direct flights by Indonesia's national carrier Garuda between Bali and Mumbai starting from April 2018 as well as the flights by Batik Air and Air Asia Indonesia serving Indonesian and Indian cities.
They directed civil aviation authorities of both countries to discuss the matter of enhancing the traffic rights through the bilateral air services consultation that will take place in 2018.
The two countries have also agreed to upgrade their ties to Comprehensive Strategic Partnership, the only other country with who Indonesia has a similar partnership is China.
They welcomed the plan to build connectivity between Andaman Nicobar-Aceh to unleash the economic potentials of both areas. They appreciated the decision to set up a Joint Task Force to undertake projects for port related infrastructure in and around Sabang, only 100 nautical miles from the southern tip of the Andaman and Nicobar Islands.