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India's Modi talks terror and trade with Pakistan PM

India's Prime Minister Narendra Modi called for a clampdown on terror groups while offering closer trade relations Tuesday in talks with his Pakistani counterpart during an action-packed first full day in office.

NEW DELHI: India's Prime Minister Narendra Modi called for a clampdown on terror groups while offering closer trade relations Tuesday in talks with his Pakistani counterpart during an action-packed first full day in office.

Modi, who was sworn in on Monday after a landslide election victory earlier this month, also announced a leaner team of ministers who pledged to work to fire up slowing economic growth to fulfil campaign promises.

Modi's meeting with his Pakistani counterpart Nawaz Sharif and other South Asian leaders invited to his inauguration was a first test on foreign policy for the 63-year-old, who has no prior diplomatic experience.

He stuck broadly to the position of the previous government, calling for action on anti-India militant groups in Pakistan and expressing hopes trade could bring the nuclear-armed rivals together.

Modi "underlined our concerns related to terrorism," Indian foreign secretary Sujatha Singh said in a statement after the talks.

"We want peaceful and friendly relations with Pakistan. However, for such relations to proceed, it is important that terror and violence is brought to an end," Singh told reporters.

"There was discussion on trade and we noted that we were fully ready to fully normalise trade and economic relations."

The two leaders shook hands and smiled for the cameras earlier in the day on the steps of a government building in central New Delhi before a 50-minute meeting that ran over its allotted time.

Sharif arrived in New Delhi on Monday for the lavish swearing-in of Modi, a former tea boy who has been elected leader of the world's largest democracy with the strongest mandate in 30 years.

The Pakistani prime minister hailed a "historic opportunity" for ties on Tuesday and said the talks had been "warm and cordial".

They had an opportunity as newly elected leaders "of meeting the hopes and aspirations of our peoples, that we will succeed in turning a new page in our relations", he said.

Modi has an image as a hardliner, even within his own Hindu nationalist party, and is regarded with deep suspicion by many in Pakistan after deadly anti-Muslim riots erupted in his western fiefdom of Gujarat in 2002.

It was the first time an Indian prime minister had hosted a Pakistani leader for official talks in Delhi since the rupture in relations that followed the 2008 attacks in Mumbai, which killed 166 people.

The attacks were blamed on Lashkar-e-Taiba (LeT), a Pakistani militant group which is now accused of being behind an attack last week on an Indian diplomatic mission in western Afghanistan.

Afghan President Hamid Karzai, who also met Modi on Tuesday, pointed the finger at LeT for last week's attack in Herat. But a man claiming to be a spokesman for the group denied this in a call to AFP's office in Kashmir.

The talks came hours after Modi announced his cabinet, with Sushma Swaraj -- the most senior woman in his Bharatiya Janata Party (BJP) -- named as foreign minister.

Arun Jaitley, a 61-year-old lawyer, emerged as the most powerful man after Modi with the crucial finance and defence portfolios, while BJP president Rajnath Singh is the new home affairs minister.

"I am conscious of the fact that I am taking over at a challenging time, particularly when there is a need to restore confidence in the Indian economy," Jaitley told reporters.

"The challenges are very obvious. We have to restore back the pace of growth, contain inflation, and obviously concentrate on fiscal consolidation itself."

As defence minister, expected to be a temporary responsibility, his challenge was underlined by another accident that saw an ageing Russian-made MiG fighter jet crash in the northwest, killing the pilot.

The chiefs of the armed forces are desperate for new equipment to upgrade India's military capabilities, with procurement held up under the previous government by corruption scandals and red tape.

Modi named a government of 46 members including himself -- 25 fewer than in the outgoing administration headed by the left-leaning Congress party.

The smaller team is part of a drive to speed up decision-making and slash India's notorious bureaucracy, blamed in part for a slowdown in the economy which is growing at its lowest rate in a decade.

India still has what seems enviable 4.9 percent annual growth, but this is half of the rate in 2011. The country needs double-digit expansion to create enough jobs to employ a ballooning youth population, economists say.

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