Indian Prime Minister Narendra Modi (L) and South Korean President Park Geun-Hye hold a joint news conference at the presidential Blue House on May 18, 2015 in Seoul, South Korea. Reuters/Chung Sung-Jun

South Korea and India agreed on Monday to step up defense cooperation while South Korea pledged $10 billion in finance for infrastructure projects as Indian Prime Minister Narendra Modi arrived for a visit.

South Korea's Ministry of Strategy and Finance and the Export-Import Bank of Korea will create a $1 billion Economic Development Cooperation Fund and provide $9 billion in export credits to India, the two countries said in a statement.

Modi signed the deal with South Korean President Park Geun-hye at the beginning of a two-day visit to Seoul.

Seven out of 10 points in the joint statement were focused on defense cooperation including exchanges between South Korean and Indian shipyards, and their navies.

"I have requested President Park to support the participation of Korean companies in the defense sector in India. Her response has been positive," Modi said in remarks at a joint news briefing with the South Korean president.

Modi arrived from Mongolia and earlier visited China on a three-country Asian tour aimed at building economic ties.

Modi has been active diplomatically since taking office a year ago, and has made a point of forging closer relations with countries on China's periphery - a move seen by some observers as a response to China's own strategic relations with India's neighbors.