Prime Minister Narendra Modi and Iranian President Hassan Rouhani during delegation-level talks discussed the spread of instability, radicalism and terrorism in the region.
The two leaders, who had previously discussed the issue last year when they met in Ufa, Russia, shared common ground that terrorism and extremism posed several challenges to peace and stability in the region.
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The two nations, he said, "have agreed to consult closely and regularly on combating threats of terrorism, radicalism, drug trafficking and cyber crime."
The two countries also decided to enhance interaction between their defence and security institutions on regional and maritime security.
The Iranian President said India and Iran have agreed to cooperate on intelligence sharing to combat terrorism.
"Due to the importance of stability and security in the region especially in countries like Afghanistan, Iraq, Syria and Yemen. Because a big problem of terrorism was running rife and rampant in the region, the two countries discussed about political issues and have agreed to cooperate on intelligence sharing," Rouhani said.
India and Iran, he said, have decided to "get closer to each other to fight terrorism and extremism and contribute to peace and stability in the region," he said.
Stating that the past history of ties between the two nations has been rich, Modi said Rouhani and he would leave no stone unturned to work for its glorious future.
"Our friendship will be a factor of stability in our region," Modi said.
Quoting a couplet from Ghalib, the Prime Minister said once minds are made up, the distance between Kaashi and Kaashan is only half a step.
Modi said India and Iran are not new friends and their 'dosti' is as old as history.
"Through centuries, our societies have stayed connected through art and architecture, ideas and traditions, and culture and commerce. As friends and neighbours, we have shared interest in each other's growth and prosperity, and joys and sorrows," he said.
During the talks, Modi said, the two sides focused on the full range of their bilateral engagement and views were exchanged on the emerging regional situation and global issues of common concern.
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