Modi, who was received by his counterpart Lotay Tshering, is also likely to sign 10 MoUs. Five inaugurations, including that of the Mangdechhu hydroelectric power plant and the ISRO-built earth station in Thimphu, are also likely to be held in his honour.
External Affairs Ministry spokesperson Raveesh Kumar tweeted: "A central pillar of our 'Neighbourhood First' policy. Continuing the high-level exchanges between the two countries. This is PM's second visit to Bhutan and the first since his re-election."
Kumar also shared on Twitter pictures of Modi's arrival in Bhutan. "Breathtaking setting for the welcome ceremony as PM Modi lands at Paro airport in Bhutan. As a gesture of extraordinary warmth and goodwill, PM Modi was welcomed by Prime Minister of Bhutan and other ministers."
Modi, in his departure statement issued on Friday, said his government attaches high importance to the Himalayan nation and the visit at the beginning of his current term underpins the solid relations between India and Bhutan.
He added that his visit will further strengthen the valued friendship with Bhutan, and help in carving out a roadmap for a prosperous future and the development of people from the two countries.
"India-Bhutan partnership today is of a special character and substance and forms an important pillar of India's 'Neighbourhood First' policy..." Modi had said in a pre-departure statement.
( With inputs from IANS )