India and Malaysia on Tuesday decided to elevate their ties to the level of comprehensive strategic partnership following talks between Prime Minister Narendra Modi and his Malaysian counterpart Anwar Ibrahim.

The two sides inked a number of pacts, including one on employment and repatriation of workers and another on boosting cooperation in the area of digital technologies.

Ibrahim began his three-day visit to India on Monday night. It is his first visit to India as prime minister.

The larger focus of the Modi-Ibrahim talks was to expand trade and investment and explore cooperation in new and emerging areas.

We have decided that the India-Malaysia partnership will be elevated to a Comprehensive Strategic Partnership, Modi said in his media statement, adding there is a lot of potential for cooperation in the economic sphere.

Modi also described Malaysia as an "important partner" of India in the ASEAN (Association of Southeast Asian Nations) and Indo-Pacific region. We agreed that review of the free trade agreement between India and ASEAN should be completed in a timely manner.

The prime minister also said that work will be done to link India's payment system UPI with Malaysia's PayNet.

The two sides also deliberated upon new possibilities of cooperation in the defence sector as well.

We have unanimous views in combating terrorism and extremism, Modi said.

In an apparent reference to the situation in South China Sea, Modi said: "We are committed to freedom of navigation, overflight as per international laws and favour resolution of all disputes peacefully."

In his remarks, Ibrahim said all issues, sensitive or likewise, were discussed in reflection of the true meaning of friendship between the two countries.