"Science is universal. Technology must be local," the PM said, calling upon IITs to bring about a "positive change" in the quality of life of the people in the country.
Citing examples of a range of defence and health sector equipment and sensitive and security-related items like currency ink and tear gas which are imported, he exuded confidence that India has the talent to produce them indigenously.
"I refuse to believe that India does not have the talent to make these things" the PM said, asking the IITs to take up such challenges.
Addressing a conference of Chairmen of Boards of Governors and directors of IITs presided over by President Pranab Mukherjee at Rashtrapati Bhawan here, he asked them to come out with projects that can provide innovative solutions to the common people in their day-to-day lives.
He also asked IITs to adopt nearby engineering colleges to play a "mentoring" role and search for innovations developed by people.
Describing IITians as a "great force", he said IITs must encourage their alumni to interact with students so that their experience can be leveraged and sought their systemic mapping and grouping for optimum utilisation of their experience.
He asked them to contribute towards fulfilling the vision of "housing for all" through technology that would enable rapid construction of economical, eco-friendly and structurally sound houses.
Modi also asked them to contribute towards user-friendly innovation in Indian Railways.
The Prime Minister also asked them to instill among bright young minds at various IITs a sense of "service" towards the nation.
"How can IITs teach our students the science of thinking and the art of living", Modi said.
Hailing the President's initiative for the education sector, he said his guidance will benefit the nation, and future generations in a big way.
The Prime Minister said while global rankings are important, "we should also set up our own parameters for rankings, which will serve as an in-built mechanism for change and improvement".
The IIT conference today is slated to discuss a framework for ranking of institutes in the country.
Giving impetus to research and innovation, use of technology in pedagogy and online learning, deepening of engagement of IITs with community and resource mobilisation as well as alumni participation will also be discussed at the day-long conference.