"Greater participation and engagement of industries in Hyogo (prefecture of Japan) will benefit Japan and India's MSME sector for which it could prove transformational," Modi said at a lunch hosted in his honour here by Japanese Prime Minister Shinzo Abe following the signing of a memorandum of understanding (MoU) between the state government of Gujarat and the government of Japan's Hyogo prefecture.
Modi recalled his visits to Kobe in 2007 and 2012 even before he became Prime Minister and said that the Indian community in this Japanese city has a long history of trade and commerce.
"I congratulate all residents of Kobe on the forthcoming 150 years of its port," he said.
"Our relationship is characterised by complete trust and mutual confidence. I thank (Hyogo) Governor (Toshizo) Ido for his valuable efforts to develop relations with Gujarat."
Earlier on Saturday, the third and last day of his visit to Gujarat, Modi along with Abe travelled by the Shinkansen high-speed rail from Tokyo to Kobe.
Following the lunch, he visited the Kawasaki Heavy Industries plant here where the high-speed trains are manufactured to take first hand knowledge of the technology.
During Abe's visit o New Delhi last year, Japan committed itself to develop a high-speed railway between Ahmedabad and Mumbai.
Modi arrived in Tokyo on Thursday and participated in the annual India-Japan bilateral summit with Abe on Friday following which 10 agreements were signed between the two sides, including the landmark civil nuclear agreement.
This is his second visit to Japan in two years.