Narendra Modi gestures during his swearing-in ceremony in New Delhi. AFP

Narendra Modi was sworn in for a second term as India's prime minister on Thursday after an overwhelming election victory for his Hindu nationalist party in a country of 1.3 billion people seeking swift economic change.

President Ram Nath Kovind administered the oath to Modi and his Cabinet ministers.

Missing from the new Cabinet were former External Affairs Minister Sushma Swaraj and Finance Minister Arun Jaitley, who stepped aside for health reasons.

The portfolios of the Cabinet ministers were expected to be announced later Thursday. They include new appointee Amit Shah, who has headed Modi's Bharatiya Janata Party as president since 2014.

In the recent elections, Modi's Bharatiya Janata Party won 303 seats in the 542-member lower house of Parliament, giving him huge authority.

However, he faces immense challenges including a slowing economy, high 6.2% unemployment and low agricultural prices that have hurt farmers.

The opposition Congress party, which had dominated Indian politics since the country won independence from Britain in 1947, was reduced to 52 seats. Its key leaders, Sonia Gandhi and Rahul Gandhi, attended Thursday's ceremony at the presidential palace.

Ram Nath Kovind, left, administers oath to Narendra Modi.

The ceremony was attended by several South Asian and Southeast Asian leaders as part of Modi's effort to build economic partnerships in the region.

Modi did not invite Pakistani Prime Minister Imran Khan, signifying that tense relations continue between the nuclear-armed rivals.

Modi has been demanding an end to Pakistan's support for insurgent groups which attack Indian forces and installations in disputed Kashmir. Pakistan says it provides only moral and diplomatic support to these groups.

Modi invited then-Pakistani Prime Minister, Nawaz Sharif, for his swearing-in ceremony in 2014. But hostility between the two nations, which have fought three wars since winning independence from Britain in 1947, has not eased in the past five years.

Those attending Thursday's ceremony included Thai envoy Grisada Boonrach, Kyrgyz President Sooronbay Jeenbekov, Bangladesh President Mohammed Abdul Hamid, Sri Lankan President Maithripala Sirisena, Mauritius President Pravind Kumar Jugnauth, Nepalese Prime Minister K.P. Sharma Oli, Bhutan Prime Minister Lotay Tshering and Myanmar President Win Myint.

Agencies