The Indian government on Friday announced that S Jaishankar, a former foreign secretary, would succeed Sushma Swaraj as the country's external affairs minister, a day after Narendra Modi was sworn in for his second term as India's prime minister.

Jaishankar was India's longest-serving ambassador to China, with a four-and-a-half year term from June 2009 to December 2013. Then he served as India's ambassador to the United States, before becoming the foreign secretary of India in early 2015.

"It's a perfect choice for the job, and somebody with hands-on experience who can assist the prime minister in pursuing his initiatives," said Lalit Mansingh, a former foreign secretary.

Meanwhile, Modi named Nirmala Sitharaman, formerly the country's defense minister, as the next finance minister at a time when Asia's third-largest economy is stuttering.

Amit Shah, chief of the Hindu nationalist Bharatiya Janata Party (BJP), was appointed as the minister of home affairs, giving him responsibility for internal security with a control over the federal police.

Regarded as the architect of Modi's landslide victory in the recently concluded general election, Shah replaces senior BJP leader Rajnath Singh, who will now be defense minister.

Shah had been tipped as a possible candidate for the finance ministry in recent days, but the job went to Sitharaman, who has an economics background. She was also the commerce minister and briefly the junior finance minister in Modi's first term.

Sitharaman, 59, will become the senior most woman minister in Modi's cabinet and the second woman to head the finance department after late former Prime Minister Indira Gandhi.

The Indian government is considering rolling out a slew of "big-bang" economic reforms in the first 100 days of Modi's second term, with a focus on privatization of state assets and relaxation of labor and land rules for businesses, a top official at the government's main think tank told Reuters.

On Thursday, Modi was the first of more than 50 cabinet ministers and deputy ministers to take the oath of office at the presidential palace in front of 8,000 people including South Asian leaders, Bollywood stars and leading political figures.

Among them were the leaders of Bangladesh, Bhutan, Myanmar, Nepal, Sri Lanka and Thailand, which together with India, make up the Bay of Bengal Initiative. Prominent members of India's opposition were also in attendance.

Read more:

What challenges await Modi?

Decoding the Modi miracle

Modi's right-wing BJP made history by increasing their majority in a second straight landslide election win.

The 68-year-old prime minister walked up to take his oath of office to a standing ovation, with supporters in the crowd chanting "Modi, Modi."

"Honoured to serve India!" he said on Twitter soon after.

"This team is a blend of youthful energy and administrative experience," he added. "Together, we will work for India's progress."

(With inputs from Reuters, AFP)