Rahul Gandhi, often tagged as India's "prime minister-in-waiting", was elevated to the governing Congress party's number-two post, positioning him to lead the party, which his family has long dominated, in parliamentary elections next year.
"Together we will transform the country," Gandhi said in his speech accepting the post of Congress vice president on Saturday, according to the Press Trust of India news agency.
"I have great experience," the 42-year-old scion of the Nehru-Gandhi dynasty said in the northern Indian city of Jaipur, at a party meeting held to prepare for general elections in 2014.
Members of the Congress Working Committee earlier approved a motion making him - the son, grandson and great-grandson of Indian prime ministers - second in the party's hierarchy. His mother Sonia Gandhi is the party president.
The move could propel the long-anticipated accession to power of Rahul, who has long been the party's unofficial candidate to succeed Manmohan Singh, 80, as prime minister of the Congress-led national government.
Congress senior leader Janardan Dwivedi declared that Rahul Gandhi was now "next only to Sonia Gandhi in the party" and said "this decision will greatly strengthen the party and the hands of the party president".
Dwivedi added that a decision on who will lead the party in the elections would be made later. Sonia Gandhi led the party to back-to-back victories in the 2004 and 2009 polls.
Analysts said the move meant Rahul Gandhi, often accused of staying aloof from daily political battles, now must get his hands dirty trying to revive the party, which has been buffeted by slow economic growth and corruption scandals.
The decision to elevate the boyish-looking politician comes despite the party's dismal results in state elections that have raised serious doubts about his political abilities.
Congress, India's oldest political party, was routed in polls in the states of Uttar Pradesh, Gujarat, Punjab and Goa last year.
Rahul Gandhi's appetite for India's turbulent political scene has often been questioned by critics due to his refusal to accept repeated requests to take on ministerial responsibilities.
But with his mother Sonia holding the reins as Congress president, any opposition within the party to the Gandhis has been swiftly suffocated, say observers.
Oil Minister Veerappa Moily hailed Rahul Gandhi as the country's leader for the "present and for the future" at the meeting.
Party workers celebrated the announcement in the streets with fireworks but the main opposition Bharatiya Janata Party denounced Gandhi's promotion as a "sham".
Some observers argue the party's drubbing in states polls should not be taken as a sign of Rahul Gandhi's chances in the general election.
Rahul Gandhi entered politics in 2004 and became a lawmaker from Amethi seat in northern Uttar Pradesh state. The parliamentary seat was held by his mother until she shifted to a neighbouring constituency of Rae Bareli.