"Investment opportunities are better today in Afghanistan, a country that is more confident of its future," Karzai said at a news conference with India's Prime Minister Manmohan Singh.
Karzai's five-day visit was also being viewed as a bid to shore up security in the faction-ridden region before the planned departure of most NATO troops in 2014.
India has invested more than $2 billion on Afghan infrastructure, including building highways and hospitals and setting up rural electricity projects. New Delhi is hoping to gain some influence in the country post-2014, when Afghan forces become responsible for the entire country's security.
Singh said his talks with Karzai had covered bilateral relations and regional security.
"I reiterated to President Karzai our belief that Afghanistan's regional economic integration will contribute to the overall prosperity and stability in the region," Singh told reporters after the talks.
Karzai, who arrived in India over the weekend, said one of his priorities during the visit was to urge Indian companies to invest in his country.
"Indian businessmen need not shy away. The Chinese came five to six years before you and they have already got two or three major contracts," Karzai told Indian business leaders in Mumbai on Sunday.
"You should come in large numbers," he said.
The two leaders also reviewed the strategic partnership agreement that the two countries signed last year, Indian officials said.
India is also helping the Afghan government rebuild its police forces, judiciary and diplomatic services. Small batches of Afghan soldiers are also undergoing training at military schools in India, although officials are wary about disclosing the numbers.
"India is involved in capacity building in various fields including the security sector," said Yash Sinha, a top official in India's ministry of external affairs. He refused to disclose how many Afghan soldiers had been trained in India.
India and Afghanistan are careful that their cooperation efforts are not viewed as a threat by Pakistan, which lies sandwiched between the two.
The governments of India and Afghanistan share a mutual distrust of Pakistan, making them likely allies. Afghanistan says Pakistan contributes to Afghan instability by offering a safe haven to Taliban insurgents. India accuses Pakistan of harboring and nurturing terrorists who have carried out attacks in India.
Karzai has been a frequent visitor to India. The Afghan president, who earned his college degree in India, has visited New Delhi more than a half dozen times in the past few years, most recently in October 2011.
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