NEW DELHI: Prime Minister Narendra Modi on Saturday hit out at Pakistan saying it breeds, inspires and encourages terrorism.

"There is one thought in South Asia which breeds, inspires and encourages terrorism. The thought whose priority is not humanity, but extremism and terrorism," Modi said, without naming Pakistan.

He was speaking at the ceremony where families of martyrs of 1971 Bangladesh Liberation War were felicitated.

Earlier, PM Modi and his Bangladeshi counterpart Sheikh Hasina today held talks on key bilateral, regional and international issues of mutual concern.

The leaders also explored ways to strengthen bilateral ties in key strategic areas of defence, security, trade and energy.

After their restricted meeting at the Hyderabad House, the two leaders were joined by their respective delegations.

Hasina, who arrived here yesterday on a four-day trip will visit Ajmer tomorrow and will also meet Indian business leaders on Monday.

India, Bangladesh sign 22 agreements

In a bid to give boost to their ties, India and Bangladesh today inked nearly two dozen pacts in strategic areas of defence and civil nuclear cooperation after "productive" talks between their prime ministers.

Modi held extensive discussions with Sheikh Hasina on ways to strengthen the strategic partnership between the two countries. He also announced a new line of concessional credit of USD 4.5 billion for the implementation of projects in Bangladesh.

Announcing an additional line of credit of USD 500 million to Bangladesh for military supplies, Modi said it will be driven by the requirement of that country.

However, much-delayed pact on the Teesta water sharing remained elusive for the two sides. Admitting that the pact was "important" for India-Bangladesh ties, Modi assured India's commitment to the issue.

He said an "early solution can and will be found" to the Teesta water sharing issue.

After their restricted meeting, the two leaders were joined by their respective delegations.