Yadav, who is on a four-day state visit, met with the prime minister at Hyderabad House at noon, where they held delegation-level talks for about 50 minutes.
The talks were followed by signing of four agreements - to set up new railway links, an updated air services accord, an India-sponsored polytechnic and construction of a new convention hall near the India-Nepal border.
After talks and signing of agreements, Manmohan Singh hosted a working lunch for Yadav at Hyderabad House.
The Nepal president, who arrived Monday, began his day with a ceremonial welcome at Rashtrapati Bhawan, where he was received by his host, Indian President Pratibha Patil. This is the first foreign visit of Nepal's first president, who was elected in 2008 to replace King Gyanendra as head of state.
After going to Rajghat to pay tributes to Mahatma Gandhi, Yadav met with the External Affairs Minister S.M. Krishna in his suite at Taj Mahal hotel.
Yadav will also meet several other Indian leaders, including Vice President Hamid Ansari, United Progressive Alliance (UPA) chairperson Sonia Gandhi, Finance Minister Pranab Mukherjee, Home Minister P. Chidambaram and Leader of Opposition Sushma Swaraj.
President Patil is hosting a state banquet in honour of the visiting Nepali leader Tuesday evening.
Yadav will travel to Haridwar on Wednesday to take part in the Maha Kumbh Mela.