"US-India partnership is important and strategic, and that the United States looks forward to working closely with the government that the Indian people choose in the upcoming elections," a statement quoting the envoy said after the nearly one-hour meeting.
Official sources said Powell praised the "good model" of governance in Gujarat, which she felt could be taken to other parts of the world.
They said the US envoy told Modi that there was an "excellent investment climate" in Gujarat which she was visiting after 20 years.
Powell was quoted as saying that she was highly impressed with the progress the state has made over the last two decades.
The sources said Modi raised the issue of Indian diplomat Devyani Khobragade and was assured by her that the US was committed to speedy resolution of the matter.
"This meeting was part of the US Mission's outreach to senior leaders of India's major political parties in advance of the upcoming national elections," the US statement said.
"Her discussions focus on the importance of the US-India relationship, regional security issues, human rights, and American trade and investment in India," it said, adding, "The US and India are moving forward with a strategic partnership that is broad and deep."
Decks were cleared for an end to the boycott imposed in the aftermath of the 2002 post-Godhra riots when, in a sudden u-turn, the US Ambassador sought an appointment with the Gujarat Chief Minister which was granted.
US had revoked Modi's visa in 2005 under a domestic law over "serious violations of religious freedom".
Describing the meeting as warm and cordial, the sources said all facets of Indo-US relations as also global issues came up for discussion during which Powell briefed Modi on G8, G20, WTO, counter-terrorism and security cooperation.
Modi raised the issue of the need for terrorists being brought to justice, the sources said.
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