In the official ceremony, national anthems of the two countries were played and the two leaders reviewed the guard of honor.
Following the ceremony, President Rouhani and Modi started negotiations.
Indian Prime Minister Narendra Modi, leading a high-ranking political, economic and cultural delegation, arrived in Tehran on Sunday for an official two-day visit to Iran to discuss ways to promote bilateral ties between the two countries.
The two heads of state would probably discuss issues of mutual interest in several arenas, regional and international developments.
Concurrent with Modi's visit, Afghan President Ashraf Ghani would pay on official visit to Tehran today to sign a trilateral memorandum of understanding (MoU) with Iran on the development of the southeastern Iranian port city of Chabahar.
It is the first visit by an Indian prime minster to Iran over the past 15 years which will be of high importance in the wake of termination of economic sanctions against Iran.