New Delhi, (PTI) Underlining economic challenges in the current global environment, Prime Minister Narendra Modi on Monday 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. .