"This is an enormously important event for the Indian people," said Deputy National Security Adviser Ben Rhodes. The invitation "sends a very important message to the world, as well as to the American and Indian people about our commitment to embrace the potential of this relationship."
Modi, who was elected in May 2014, visited the White House in September.
A number of business leaders and members of Congress will join Obama on the trip, including House Minority Leader Nancy Pelosi and Sen. Mark Warner (D-Va.) Obama, Modi and Indian President Pranab Mukherjee will address Indian and American chief executives after the parade.
Over the course of the three-day trip, Obama will give a speech on the future of the U.S.-Indian relationship, pay his respects at the nation's memorial to Mahatma Gandhi, and visit the Taj Mahal before heading home.
Officials said Obama and Modi are expected to conduct talks around the business climate, trade, climate change, Afghanistan and terrorism.
The trip is Obama's second to India. He visited Mumbai and New Delhi in 2011.
