The 59-year-old Khurshid, who is 21 years younger than his predecessor S.M. Krishna, was the most eye-catching appointment in a cabinet revamp designed to reinvigorate a government which has shown distinct signs of fatigue.
His appointment comes at a time when he is battling accusations that funds intended for an NGO run by his family have been misappropriated.
As he moved into his new office in New Delhi, Khurshid made clear that he would get straight to work and said that he had been briefed by Prime Minister Manmohan Singh, 80, to bring fresh thinking to his post.
“I have a lot of home work to do … as I want to take India’s foreign policy ahead,” he told reporters shortly after he was officially elevated from his post law minister.
“In the last few years, foreign policy has vastly changed … We have to do out of box thinking and go beyond theology.
“We have to think of the great opportunities the world offers today,” added Khurshid who is India’s first Muslim foreign minister in 16 years.
As for any foreign minister in New Delhi, Khurshid’s most delicate diplomatic dossier will be relations with Pakistan.
The two neighbours last year resumed their tentative peace process, which collapsed after a gunmen from Pakistan killed 166 people in Mumbai in November 2008.
One of the most embarrassing episodes of Krishna’s tenure came in 2010 at talks in Islamabad with his Pakistan counterpart Shah Mehmood Qureshi who accused him during a press conference of having to take his orders by phone from New Delhi.
The gaffe-prone Krishna also came in for ridicule in the same year when he read out parts of the Portuguese foreign minister’s speech at a meeting of the United Nations Security Council in New York.
Analysts said Khurshid, who served as junior foreign minister in the 1990s, was likely to demonstrate a surer footing than his predecessor.
“One thing is clear, the man knows his job,” said S.K. Jha, a professor of international relations at the Jamia Millia Islamia University in New Delhi.
“He has a grip on diplomacy and will not be a cause of embarrassment like Krishna,” Jha told AFP.
Labelled “Mr. Confident” by the media, Khurshid hails from a family which has been at the heart of Indian politics ever since independence.
His father, Khurshid Alam was the first Muslim to serve as a minister in the foreign office and his great-father, Zakir Hussain, was the president of India.
Khurshid junior studied at Oxford University in England before becoming a lawyer in the Supreme Court. He also worked as a teacher.
Khurshid has been in the headlines more recently over accusations that he and his wife Louise had siphoned off funds for a charity for the disabled.
The accusations were first aired in a television documentary and taken up by anti-corruption campaigner Arvind Kejriwal whom Khurshid has accused of wanting to destroy mainstream parties after launching his own political career.