Narendra Modi has been sworn in as India's new prime minister in a ceremony attended by his counterpart from rival Pakistan.
Nawaz Sharif joined other regional leaders at the inauguration in Delhi's presidential palace.
It is the first time since the two countries won independence in 1947 that a prime minister from one state has attended such a ceremony in the other.
Mr Modi led his BJP party to a landslide win in the recent election.
The BJP won the biggest victory by any party in India for 30 years, gaining a majority in parliament and trouncing the outgoing Congress Party.
Monday's grand outdoor ceremony in front of the presidential palace was attended by the leaders of all seven South Asian countries as well as Mauritius.
But all eyes were on the presence of Mr Sharif, who is expected to hold bilateral talks with Mr Modi on Tuesday, says the BBC's Sanjoy Majumder.
The two nuclear-armed rivals have fought three wars in the past 60 years, and Mr Modi's BJP party advocates a tough stance on Pakistan.
"It is a great moment and a great opportunity," Mr Sharif told the NDTV network on his arrival in Delhi for the swearing-in ceremony.
"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."
The Pakistani prime minister said the neighbours should use their cultural and traditional similarities to help improve ties.
"We should remove fears, mistrust and misgivings about each other... Both countries should rid the region of instability and security that has plagued us for decades," he added.
Several thousand guests attended the inauguration during which President Pranab Mukherjee administered the oath of office to Mr Modi, 63, and his council of ministers.
Besides Mr Sharif, other regional leaders attending the ceremony included Sri Lanka's President Mahinda Rajapaksa, Afghan President Hamid Karzai, Bhutanese Prime Minister Tshering Tobgay, Nepal's Prime Minister Sushil Koirala and Maldives' President Abdulla Yameen Abdul Gayoom.
Bangladesh is represented by Speaker Shirin Chaudhury as PM Sheikh Hasina is visiting Japan, reports say.
Tight security and traffic restrictions have been imposed in Delhi and all offices around the presidential palace were closed five hours before the event, according to the Press Trust of India.
Given the margin of victory, the BJP will be able to govern without coalition partners - 272 MPs are required for an absolute majority.
The Congress party finished with just 44 of the 543 seats and under 20% of the vote in what was its worst-ever performance.