"I feel really blessed to be here in the place of king Janak", he said.
This is the third time that Modi has visited Nepal since becoming India's PM. Thousands of people have gathered in the Janaki temple premises to welcome Modi.
Modi also hailed the three successful polls in Nepal after the promulgation of the new Constitution in 2015.
Janakpur is known as the birthplace of Sita, the wife of Lord Rama. The Investment Board Nepal (IBN) on Thursday had granted an electricity generation licence to SJVN Arun III Power Development Company to generate power from the Arun III project located in eastern Nepal.More news: Kendall Jenner opens up about little sis Kylie's pregnancy
Prime Minister Narendra Modi, who has been on the campaign trail in Karnataka for the past 10 days, appeared to be still in election mode when he addressed a civic reception at Janakpur in Nepal on Friday morning.
Ties deteriorated after protesters on the India-Nepal border blockaded the movement of goods vehicles-slowing or stopping critical fuel and medical supplies-amid suspicions in Nepal that New Delhi was backing the blockade.
"We remain committed to doing everything that we can, which furthers the economic development of Nepal", he said.
Modi is on a two-day visit to Nepal, which came about after he received an invitation from his Nepalese counterpart. "When I talk about "Sabka Saath Sabka Vikas", I not only talk about India but also about neighbouring countries", he said.More news: Remembering 'Mr Wales', soldiers look forward to Harry and Meghan's big day
"These connectivity measures will help Nepal to get better market access, thereby encouraging the establishment of industries and employment creation", Modi said. Janakpur sub-metropolis Mayor Lal Kishor Sah was also present during the felicitation.
Modi also held a discussion with Nepali Foreign Minister Pradeep Gyawali about areas of mutual interest.
Similarly, Birgunj Chamber of Commerce and Industry and Janakpur chapter of Chamber of Commerce and Industry too had offered a garland weighing 125 kg. "We want more pilgrims and tourists to visit each other's countries", PM Modi tweeted. Oli said that the bus service "would increase people to people connectivity".More news: Chelsea draw with Huddersfield as Champions League hopes fade