- The leaders addressed stalled talks on EU-Indian free trade
- They will meet again at a G20 summit in Hamburg next month
- PM Modi and Ms Merkel have signed eight deals today
Ms Merkel has long cultivated strategic relations with India and often stresses that Germany and the European Union must compete with the new emerging economic giants. On Sunday, she said that Germany can no longer completely depend on traditional allies the United States and Britain in the age of President Donald Trump and Brexit.
PM Modi and Ms Merkel addressed stalled talks on an EU-Indian free trade and investment deal at a time when New Delhi is uncomfortable with Beijing's Silk Road trade and infrastructure initiatives across Eurasia.
The two leaders - who will meet again at a G20 summit in the German city of Hamburg next month - were also expected to discuss the growing military reach of China across the contested South China Sea and into the Indian Ocean.
PM Modi -- before embarking on his tour, which also takes him to Spain, France and Russia -- wrote that "India and Germany are large democracies, major economies and important players in regional and global affairs".
"Our strategic partnership is based on democratic values and commitment to an open, inclusive and rules-based global order," he wrote in a Facebook entry, contrasting India with the one-party state China.
Having had a dinner Monday at the Schloss Meseberg retreat outside Berlin, PM Modi and Ms Merkel led a joint cabinet meeting grouping foreign, economy, environment and other ministers. The talks are their fourth intergovernmental consultations -- a format Germany has only with a few countries, which include China, Israel and France.
Germany is India's largest trading partner in the EU, and a top source of foreign direct investment. More than 1,600 German companies with over 400,000 employees operate on the subcontinent.