New Delhi, Nov 7 (PTI): Underlining economic challenges in the current global environment, Prime Minister Narendra Modi today said India and the UK can leverage technological prowess to create new opportunities, while seeking investments in defence, manufacturing and aerospace sectors.

Speaking at the India-UK Tech Summit, Modi showcased his government's initiatives in sectors like smart cities, startups and digital economy as he sought enhanced engagement with Britain.

"Together, we can create a vibrant and thriving environment for new commercial applications with breakthrough technologies," he said at the event, also attended by visiting UK Prime Minister Theresa May.

Modi further said that both countries face numerous economic challenges in the current global environment which directly affect trade and commerce.

"But I am confident that together we can leverage our scientific strengths and technological prowess to create new opportunities," he added.

India, he said, is now the fastest growing large economy with the most open investment climate.

"We also expect 'Make in India' to be a key sector of bilateral engagement. Advanced manufacturing is a special endeavor under this programme. The UK as a leading player can benefit from our liberal FDI policies in defence manufacturing, aerospace and electronics engineering," the Prime Minister said.

He said India's vast traditional knowledge base can be coupled with UK's modern scientific investigation to provide a holistic approach to preventive healthcare. "This can help address some of the modern lifestyle diseases that we face."

The Prime Minister said even though the quantum of bilateral trade has remained at the same level for the past five years, investments in both directions have been robust.

India, he said, is the third largest investor in the UK, and Britain is the largest G20 investor in India. Both countries support large numbers of jobs in each other's economies.

Modi said the 'Smart City' mission aims to integrate digital technology into rapidly urbanising environment and there is already a high level of interest from the UK in projects in Pune, Amaravati and Indore.

"I understand that UK companies have already signed deals worth 9 billion pounds and I encourage more participation," the Prime Minister said.

The 'Start-up India' programme aims at converging innovation and technology with entrepreneurship for tech-savvy youth. "Today, India and the UK have emerged amongst the top three largest startup hubs in the world with an exciting ecosystem of investors and innovators," he said.

"I believe that India and the UK must continue to nurture and support an ecosystem of high quality fundamental research to pave the way for joint technology development that can address global challenges," Modi said.

Stating that the India-UK Tech Summit focuses on higher education, he said it is vital for Indian students and will define the bilateral engagement in a shared future.

"We must therefore encourage greater mobility and participation of young people in educational and research opportunities," he said. Science, technology and innovation, the PM said, are immense growth forces and will play a very significant role in India-UK relationship.

"I have always said that science is universal but technology has to be local," he said, adding the summit like India-UK Tech Summit throws an opportunity to understand each other's requirements and forge a future relationship.

He said the convergence of his government's flagship development missions, technology achievements and aspirations, and strong bilateral relations offer huge new growth avenues for Indian and UK companies.

"There is an opportunity for India and the UK to collaborate in the 'Digital India' and expand information convergence and people centric e-governance," he added. India, he said, will soon have over a billion phone connections with an urban tele-density of around 154 per cent.

The country has 350 million internet users and the government is bringing in last mile connectivity to nearly 100,000 villages across the country. "Such rapid growth offers new digital highways and new markets for the UK and Indian companies to address," Modi said.

Also, there is a scope for natural collaboration in India's rapidly developing financial services sector, he said, adding 'Fintech' is emerging as the next big transformation for India as 220 million new households are brought into the umbrella of the financial inclusion scheme, Jan Dhan Yojana.

"With UK's leadership in financial technology and international finance, promising opportunities can be harnessed by our enterprises in this mission," he said.