"There is a need for global action to deal with terrorism. All nations should commit that they will not provide shelter to terrorists but punish them," Modi said at a joint press interaction with French President Francois Hollande after their talks in Paris.
Hollande said he understands anger in India over the release of a person who is responsible for such a reprehensible act, a reference to Lakhvi who was behind the attack in Mumbai in November 2008 that claimed 166 lives.
Modi and Hollande discussed the issue of terrorism in the context of recent attack in Paris and release of Lakhvi and decided to intensify cooperation against the menace.
"The world is facing many challenges. There is an upheaval in the world and all are affected...Terror is spreading in new forms in various countries," the prime minister said.
France suffered in Paris when terrorists struck here in January and understands India's "pain" over terrorism, he said.
"They agreed that India and France must intensify their cooperation within the framework of JWG on Counter-Terrorism, including on information and intelligence sharing on terror networks and work together to share experiences on dealing with the growing phenomenon of radicalisation," a joint statement said after Modi and Hollande held wide-ranging talks.
"They asked officials on both sides to schedule the next meeting of the JWG on Counter-Terrorism at the earliest," it said.
The two countries also agreed to commence bilateral dialogue to discuss ways and means of enhancing their cooperation in the maritime domain, in particular in the Indian Ocean Region.
"India welcomes closer engagement of France in the affairs of the Indian Ocean Rim Association and will continue to work closely with France in realisation of the objectives enshrined in the Charter of the Association," the statement said.
"The two leaders noted with satisfaction the holding of second round of the Cyber Dialogue on 17 March 2015 in New Delhi, which outlined new areas of cooperation between France and India in the field of cyber security," it said.