The diaspora as an instrument of state power can be used as hard power, soft power, or an agent of soft power to pursue hard power. As soft power, diaspora plays an important role, especially in the case of India, which has the largest diaspora population in the world. Nevertheless, the Indian diaspora is an extremely heterogeneous group with equally heterogeneous identities and forms of affiliation with India. Hence the soft power role of the different categories of diaspora too have been different. The highly skilled elite Indian diaspora in the Western countries, no doubt, has been instrumental in giving a new aura to India and its people by proving their scientific and professional calibre; the indentured diaspora has been mainly responsible for the geographical spread of Indian culture. They have also proved their potential by playing major political and economic roles in the countries of their adoption. This chapter is an attempt to explore the soft power role of various groups and categories of people within Indian diaspora, and India’s response to them. The chapter also gives an overview of the Indian diaspora and traces the evolution of India’s diaspora policy.