Placing Sonia Gandhi at the 17th spot, the magazine said: "Although India's political scene is riven by factions, Congress remains the strongest national force, and the Italian-born widow of late former prime minister Rajiv Gandhi rules it unchallenged. In the world's largest democracy, she's queen."
Shah Rukh Khan, who occupies 41st spot in the magazine's 50 most powerful people, was described as the "King of Bollywood."
"It's not just that his (Shah Rukh Khan's) romantic flicks make gazillions, it's where those gazillions come from. Khan is huge in the Muslim world, even in Pakistan and Afghanistan, where the mullahs ban his films. (The movies thrive on the black market., " the newsweekly said.
"Their main appeal is certainly the song-and-dance numbers, but Khan (a Muslim married to a Hindu) makes devoutly secular films where love trounces bigotry."
Pakistan army chief Ashfaq Parvez Kayani, who controls the country's nuclear weapons, is placed 20th on the list of the global "power elite" at the beginning of 2009 in the magazine's January issue.
Obama, who scripted history by becoming the first black-American to be voted to the White House, is followed by Chinese President Hu Jintao, French President Nicolas Sarkozy, British Prime Minister Gordon Brown, German Chancellor Angela Markel and powerful Russian Prime Minister Vladimir Putin.
A surprise inclusion in the list, which the magazine admits is subjective, is Osama Bin Laden, whom the Newsweek describes as "global terrorist". North Korean dictator Jim Jong II also finds a place in the list.
About 47-year-old Obama, it says the presidency of the "intensely charismatic" Democrat, who will be inaugurated Jan 20, will be judged on how he handles the economic crisis that now envelops the US and the world. "For Obama to be remembered as a great President, he has to do nothing less than rescue capitalism."
For Bin Laden, who finds 42nd spot, the magazine says the manhunt may not have been successful, but it has driven him far underground. Once a glutton for publicity, he has not shot a new video since September 2007, and no audio message from him has been heard since May 2008, it says.
Chinese President Hu, who was awarded the second place after Obama, Newsweek says, is a guy "you wouldn't think twice about...cautious, colourless and corporate. In the past he has often lost the spotlight to other world leaders with bigger egos and sharper elbows. But to underestimate Hu Jintao would be a monumental error."
"His position as China's president makes him CEO of a financial juggernaut that's projected to post a $280 billion trade surplus this year. While the rest of the world plunges deeper into recession, Hu the Humble is emerging as the one who is holding the lifeline."
Among others on the list include the Dalai Lama, former US president Bill Clinton and his wife Hillary, Iranian strongman Ayatollah Ali Khemenei, Saudi King Abdullah bin Abdulaziz Al-Saud, American General David Petraeus, Iraqi leader Nuri al-Maliki, US House Speaker Nancy Pelosi, New York Mayor Michael Bloomberg, Pope Benedict XVI, Media mogul Rupert Murdoch and popular show host Oprah Winfrey.