The talks are expected to lay the ground for more structured discussions between them when the Chinese President visits India sometime later this year.
One of the main issues likely to come up during their talks this evening is trade in bilateral and international context.
After Modi was re-elected on May 23, Xi was among the first world leaders to greet him.
In a letter sent to Modi, the Chinese President said he attached great importance to nurturing bilateral ties with India.
He identified "multi-polarisation, economic globalisation and upholding multilateralism" as areas of common efforts.
After meeting Xi, Modi will have talks with Putin. This will be Modi's first meeting with the two leaders in his new term.
The Russian President too had sent a congratulatory message to Modi on his re-election and expressed readiness to enhance the comprehensive development of "special and privileged strategic partnership" between the two countries.
"I would like to reiterate my readiness to continue our fruitful personal contacts and joint work to consolidate the entire gamut of bilateral ties and constructive engagement in international affairs," he said.
In the evening, Modi will attend an informal dinner hosted by Kyrgyz President Sooronbay Jeenbekov, who had last month attended his swearing in as SCO chairman.
Later, he will have a bilateral meeting with Afghan President Ashraf Ghani
Pakistan Prime Minister Imran Khan will also be attending the SCO Summit but no meeting is scheduled between him and Modi.