"Defence cooperation between the two countries now has a new significance," Macron said as a gushing Prime Minister Narendra Modi stood by his side.
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Under the deal, India and France will open their naval bases to warships from each other, a move seen as an attempt to undermine China's territorial ambitions.
"A strong part of our security and the world's stability is at stake in the Indian Ocean," Macron said.
"The Indian Ocean, like the Pacific Ocean, cannot become a place of hegemony," he added in an apparent reference to China.
Modi, who welcomed Macron with a bear hug on his arrival Friday, said the accord was crucial as the Indian Ocean region would play a "very significant role" in the days to come.
The comments from the leaders followed a slew of agreements signed by the two countries in the spheres of defence, space and clean energy.
"From the ground to the sky, there is no subject on which India and France are not working together," said Modi.
A technical agreement was also signed on the French-assisted nuclear power project at Jaitapur in western Maharashtra state.
Sources in the French presidency told AFP they were optimistic of a final agreement being signed before the end of the year.
The $9.3-billion framework agreement for six nuclear reactors was signed during a visit to India in 2010 by then president Nicolas Sarkozy.
But the project has since run into stiff opposition from environmentalists concerned about seismic activity in the area and fears about the safety of nuclear power in the wake of the Fukushima nuclear disaster in Japan.
'Good chemistry'
Earlier in the day, Macron talked about his personal rapport with Modi which was established after their meeting in Paris last year.
"I think we have very good chemistry, our two great democracies have a historic relationship," the French president said.
Modi broke protocol to receive Macron at the airport, exchanging warm hugs and robust handshakes.
"You welcomed me in Paris last year with an open heart and a lot of warmth. I am happy that I have got an opportunity to welcome you in India," Modi said at the start of his speech Saturday.
On Sunday, Macron will attend a solar power summit designed to showcase India and France's commitment to fighting climate change, which both leaders have made a priority.
Travelling with his wife Brigitte, France's 40-year-old president will also visit the monument to love, the Taj Mahal, a few hours drive from the Indian capital on Sunday.
On Monday, he heads to the chaotic Hindu holy city of Varanasi on the banks of the river Ganges, which the Indian premier has promised to modernise and clean up.
Macron's visit comes after a somewhat misstep-laden visit to India by Canadian prime minister Justin Trudeau.
Both he and Macron are often compared internationally because of their broadly similar political views, as well as youth and good looks.
But Trudeau's visit hit a series of embarrassing bumps and he received a fairly cool reception during his stay in India.
Trudeau was pilloried on social media and in the Canadian press for donning traditional Indian clothing at every opportunity.
And there were red faces when it emerged a former Sikh militant was invited to a dinner with him in Mumbai.
Macron has so far opted for more sober and predictable dress -- a dark suit.
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