Modi and Merkel on Sunday jointly inaugurated the Hannover Messe, the world's biggest industrial fair. India is a partner country at the fair this year.
The prime minister made a strong push for the "Make in India" initiative in Hannover.
Modi then went to Berlin where he visited the Siemens Technical Academy, attended a community reception and visited a German railway station to study railway modernisation.
In Ottawa, Modi will be accorded a ceremonial welcome on Wednesday and will call on Governor General David Johnston. He will also hold talks with Canadian Prime Minister Stephen Harper at a working lunch.
Modi will then head to Toronto - the most populous city in Canada - where he will attend a diaspora event in the evening.
On Thursday, Modi will attend a pension fund meeting followed by business level meetings. He will also visit the Air India Memorial in Toronto.is next stop will be Vancouver, where he is scheduled to visit the Laxmi Narayan Temple and interact with the Indian community. He will also visit a gurdwara. After attending a state dinner hosted by Harper, Modi will fly back to India.