Former Gujarat chief minister Narendra Modi was sworn in today as India’s 14th prime minister in New Delhi today.

But as historic as his inauguration is, which brings to power Modi’s conservative, Hindu nationalist Bharatiya Janata Party (the BJP, भारतीय जनता पार्टी) after a landslide victory in India’s April/May national elections with the largest mandate of any Indian political party since 1984, it’s been eclipsed by the presence of Pakistan prime minister Nawaz Sharif.

It was the first time that a Pakistani leader has ever attended an Indian inauguration, and the handshake between Modi and Sharif is an audacious start for the Modi era. Modi, who has evinced a hawkish line on foreign policy, especially regarding India’s Muslim-majority neighbors, Pakistan and Bangladesh, made the surprising invitation to Sharif late last week. Sharif, much to the world’s surprise, and likely in opposition to hardliners in his own conservative party, the Pakistan Muslim League (N) (PML-N, اکستان مسلم لیگ ن) and within Pakistan’s military and intelligence communities, accepted invitation over the weekend. 

Sharif joins a handful of regional leaders from within the South Asian Association for Regional Cooperation (SAARC) to attend Modi’s swearing-in ceremony, including Sri Lanka president Mahinda Rajapaksa and Afghanistan’s president Hamid Karzai.

Modi’s invitations weren’t without controversy at home — Modi’s hard-right, Hindu nationalist allies in Shiv Sena (SS, शिवसेना) opposed the outreach to Sharif, and Tamil Nadu leaders in both Modi’s National Democratic Alliance (NDA) and Tamil Nadu chief minister Jayalalithaa decried the invitation to Rajapaksa.

But Modi’s mandate is so sweeping that he has enough political capital to do just about whatever he wants, no matter what his allies think. Modi’s hawkish reputation, in combination with his parliamentary majority, could give him the space to pursue the kind of closer economic ties that have eluded prior Indian governments. Notably, the last BJP government, led by Atal Bihari Vajpayee, also made significant progress over a decade ago to introduce new security protocols in light of the newly nuclearized status of the two rivals.

Modi will meet with Sharif on Tuesday in a bilateral meeting that’s expected to be fairly informal in nature, in line with the spontaneous and symbolic nature of Sharif’s brief visit.

Relations between India and Pakistan have been some of the trickiest in the world since the two counties were carved out of colonial India at the time of Partition in 1947. Both countries continue to dispute the possession of Jammu and Kashmir, a Muslim-majority state in northern India along the Pakistani border. The two countries found themselves on opposite sides of the Cold War, and in the 1990s, both countries obtained nuclear weapons, making their fight over Kashmir a potentially global nuclear threat.

It’s clear that Sharif is keen on developing closer political and economic ties to India, despite conservative elements in Pakistan who have an interest in perpetuating hostility between the two countries. Sharif met former Indian prime minister Manmohan Singh at the United Nations last autumn, in a bid to establish warmer relations personal relations, after Singh declined an invitation to Sharif’s own swearing-in last summer. In his successful campaign in May 2013, Sharif campaigned on greater economic ties with India, and Sharif sees greater regional coordination as fulfilling a legacy that he began in his first two stints as prime minister in the 1990s.

Sharif, who ordered the release of 151 fishermen who had been imprisoned for fishing in Pakistani waters (?!?) as a goodwill measure, spoke of the opportunity to pick up the ‘broken threads’ of 1999: 

“No two nations have ever possessed so much of cultural and traditional similarities as India and Pakistan. Why not turn the similarities into our strength?” said Sharif. “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.”

I argued a year ago that normalized trade relations with India should be part of Sharif’s efforts to bolster his country’s economy — and the gains represent relatively low-hanging fruit, especially for Pakistan, which would gain instant access to a market of over 1.27 billion consumers:

Despite the fact that it neighbors a market of over a billion consumers, Pakistan’s largest trade partners are the United States, China, the European Union and the United Arab Emirates.  Pakistan sends nearly five times as many exports to Afghanistan (7% of total exports) than to India (1.3%)…. Sharif is likely to extend ‘most favored nation’ status to India, and although Pakistan’s agricultural and textile industries fear a sudden rush of competition, free trade could reduce the price of many everyday items for Pakistani consumers and allow for more technology imports to enhance Pakistan’s economic productivity.

So far, Sharif has failed to deliver the extension of MFN status to India. But Modi and Sharif are both economic liberals who must realize the gains for both countries through greater trade, despite strong opposition from Pakistan’s protectionist business community and a skeptical military infrastructure.

Singh, and now, presumably Modi, will worry that Sharif lacks enough control to prevent radical Islamists from committing terrorist attacks on Indian soil, and Indian-Pakistani relations remain tense following the coordinated November 2008 Mumbai bombings and shootings that unfolded over four days. It hasn’t helped matters that Indian and Pakistani troops have exchanged lethal fire at the Line of Control dividing Kashmir territory. If there’s a high-profile terror attack or Kashmir-related incident, Indian hard-liners might second-guess Modi’s gesture, and Modi might be forced to take a correspondingly more severe approach to the bilateral relationship.

Even more crucially, India’s new government will worry that Sharif lacks enough control over Pakistan’s powerful military to make any real economic or security-related advances. Sharif, more than anyone, should know the limits of civilian political control in Pakistan — it was his civilian government that former army chief of staff Pervez Musharraf toppled in 1999 in a coup, which led to military rule for the next eight years.

Raheel Sharif (no relation to Nawaz Sharif), the new chief of army staff, who succeeded the relatively apolitical Ashfaq Parvez Kayani in December 2013, has been less reticent than Kayani about inserting himself into politics and foreign policy. A month ago, on Martyrs’ Day, which commemorates the lives of Pakistani soldiers who have died in wars with India, he called Kashmir Pakistan’s “jugular vein” and demanded a UN-arbitered process to Kashmir’s citizens to determine its status.

Photo credit to Prakash Singh/AFP/Getty Images.