India PM Modi makes major cabinet changes for new term

India's Prime Minister Narendra Modi on Friday named his trusted aide Amit Shah to the key home affairs ministry as part of a major cabinet shakeup for his second term in office.

Nirmala Sitharaman moved from defence to become finance minister in a second shock, while career diplomat S. Jaishankar became foreign minister.

Hardline Hindu nationalist Shah was the president of Modi's rightwing Bharatiya Janata Party and had never served as a national minister. He was rewarded for the party's second landslide victory in the country's national election.

Shah will now have to pursue Modi's nationalist agenda in security, immigration and other key national issues.

Facing major challenges with the economy, job creation and a farm debt crisis, Modi replaced around three dozen ministers and deputy minister from the last administration, bringing in many new lawmakers.

The induction of Jaishankar, a China expert, as the new foreign minister was seen as a sign that Modi will put more emphasis on tricky diplomacy with neighbouring countries in his second term.

Jaishankar, who was the top foreign ministry official until his retirement last year, was an influential advisor to Modi on diplomacy during his first five years in power.

Modi, 24 cabinet rank ministers and more than 30 deputy ministers were sworn in at the presidential palace on Thursday.