This is the first meeting between the two leaders since Mr Sharif attended Mr Modi's oath taking ceremony in May 2014.
But relations have deteriorated since then and in August India cancelled talks with Pakistan after accusing it of interfering in its internal affairs.
The rivals have fought three wars since Independence, two of them over Kashmir.
Mr Modi is meeting Mr Sharif on the sidelines of the Shanghai Cooperation Organisation (SCO) summit in Russia on Friday.
The two leaders spoke by phone in June, at the start of the holy month of Ramadan.
High-level talks between the nuclear-armed rivals also took place in March, but other meetings have been called off amid tensions.
On the eve of Friday's talks, India accused Pakistan of killing a border guard in a firing incident along the de facto border that divides the disputed region of Kashmir.
Kashmir, claimed by both countries in its entirety, has been a flashpoint for more than 60 years.
A ceasefire agreed in 2003 remains in place, but the neighbours often accuse each other of violating it.
Last September, in his first speech at the UN, Mr Modi said he wanted peace talks with Pakistan but insisted it must create an "appropriate atmosphere".
In 2013 months of clashes left more than 20 Indian and Pakistani soldiers dead. Nearly as many civilians, most of them on the Pakistani side, were also killed.
Published: 2015-07-10 11:30:20