Indian diasporic communities that have settled in other parts of the world can and do play a critical role in either enhancing or reducing the image of their historic country of origin. This paper confines its focus mainly to India’s relations with Malaysia as the Southeast Asian country with the largest Indian diaspora. The paper argues that India’s growing diplomatic, institutional, political and security engagement with ASEAN-led institutions such as ASEAN Regional Forum and East Asia Summit is at least partially inspired by the prospect of leveraging on the presence of the Indian diaspora in Southeast Asia. It concludes that while occasional frictions may arise in India–Malaysia relations over the treatment of ethnic Indians in the country, the benefits of India’s more robust engagement with Malaysia/ASEAN outweigh the costs, given the expanding economic, industrial, commercial, investment, trade and tourism opportunities – all of which can produce a direct if not indirect impact on India’s strategic perceptions of the role of the diaspora in facilitating a more proactive engagement with the region. The quality and quantity of such interactions, buttressed by the use of ‘smart power’, will invariably influence the future direction of India’s foreign and security policy towards Malaysia/Southeast Asia.