India is hosting this year's summit, which will be held in the capital Delhi from 9-10 September.
Mr Putin rang Mr Modi and told him that Foreign Minister Sergei Lavrov would attend the summit on his behalf.
The two leaders also discussed several "regional and global issues of mutual concern", India said in a statement.
A Russian government spokesperson had said last week that Mr Putin would not attend the summit as he had a "busy schedule".
The G20 includes the world's 19 wealthiest countries plus the European Union. India currently holds the G20 presidency, which rotates annually between members.
Russia's invasion of Ukraine is expected to be a talking point at the summit in Delhi, where world leaders including US President Joe Biden and UK Prime Minister Rishi Sunak will be present.
Last week, Mr Putin attended the Brics summit - Brics is an acronym for Brazil, Russia, India, China and South Africa - held in Johannesburg by video link to avoid the risk of possible arrest by the International Criminal Court (ICC). The ICC has issued a warrant for Mr Putin's arrest, accusing him of war crimes in Ukraine.
In its statement on Monday, India said that Mr Modi expressed "an understanding for Russia's decision" and thanked Mr Putin for supporting Delhi's initiatives while it held the G20 presidency.
Russia's statement did not mention Mr Putin's absence at the G20 summit but said that the two countries had agreed to "closely collaborate in the context of Russia's BRICS chairmanship", which starts on 1 January next year.
"The discussion also touched on current issues of Russian-Indian relations, which are developing progressively in the spirit of a specially privileged strategic partnership," it added.
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