India's new Prime Minister Narendra Modi is holding talks with his Pakistani counterpart Nawaz Sharif on his first day in office.
Sharif attended Modi's swearing-in on Monday, amid hopes of a thaw in relations between the rivals who have fought three wars since independence.
Correspondents expect the two men to discuss trade but say security issues are also likely to be on the agenda.
The talks come as Modi allocated ministries in a slimmed-down cabinet.
Senior BJP MP Rajnath Singh is the new home minister, Sushma Swaraj has been named foreign minister, while Arun Jaitley will look after finance, defence and corporate affairs.
Modi led his party to a landslide in recent elections, winning the biggest victory by any party in India for 30 years. The BJP secured an absolute majority in parliament, trouncing the outgoing Congress Party.
India and Pakistan, the nuclear-armed rivals, have fought three wars in the past 60 years, and the BJP advocates a tough stance on Pakistan.
Modi himself is viewed with suspicion by many in Pakistan because of the deadly 2002 anti-Muslim riots in Gujarat that happened under his watch while he was the state's chief minister.
But in a surprise move, Modi last week invited Sharif to his inauguration and for bilateral talks.
"Let us together dream of a strong, developed and inclusive India that actively engages with the global community to strengthen the cause of world peace and development," Modi said in a message soon after he was sworn in.
Earlier in the evening in my conversation with Prime Minister Nawaz Sharif he shared some very emotional things.— Narendra Modi (@narendramodi) May 26, 2014
On his arrival in Delhi, Sharif told the NDTV that it was "a great moment and a great opportunity".
"This is a chance to reach out to each other. Both governments have a strong mandate... This could help in turning a new page in our relations."
No details have been given about what the two men will discuss.
Correspondents say Modi could raise Delhi's longstanding demand that Pakistan control militant groups like Lashkar-e-Taiba from operating on its soil.
The visuals touched both Nawaz Sharif ji & his Mother. He told me that after seeing the visuals his Mother got very emotional.— Narendra Modi (@narendramodi) May 26, 2014
The group, which India blames for the deadly Mumbai attacks of 2008, is now accused of being behind last week's attack on an Indian diplomatic mission in Afghanistan's Herat province.
"According to the information that we have available to us - one given to us by a Western intelligence agency - the perpetrators were of Lashkar-e-Taiba," Afghan President Hamid Karzai told an Indian television channel on Monday.
Karzai was the first foreign leader Modi met on Tuesday morning. He is also holding bilateral talks with the Sri Lankan President Mahinda Rajapaksa, Nepal PM Sushil Koirala and leaders of Maldives, Bhutan, Mauritius and Bangladesh.
Monday's historic swearing-in ceremony was held in the forecourt of the presidential palace in Delhi. It was the first time since India and Pakistan won freedom from Britain in 1947 that a prime minister from one state had attended such a ceremony in the other.
Modi took the oath before thousands of guests, including senior BJP and Congress leaders, Bollywood actors and top industrialists.
Forty-five MPs, including seven women, from Modi's BJP party and their allies were also sworn in as ministers.