Joseph Nye, the "Guru" of Public Diplomacy, had once stated that India (along with China) has adopted a foreign policy that made it more attractive in the eyes of others but have not been able to leverage its soft power resources like US, or Europe.
Very interesting point. Historically India has sought the moral high ground in international relations through non-aligned movement, the Panchasheel principles, Bandung Conference, membership of the Commonwealth etc. This to an extent generated considerable goodwill towards India internationally, projecting the image of a pacifist nation inspired by democratic values & Nehruvian vision of peaceful co-existence. It also helped India achieve the strategic objective of preserving it's sovereignty in a recently decolonised world mired in Cold War politics.
However, with ambitions of becoming a major world power, India now will be called on to take some pragmatic but 'hard' decisions. This might mean doing away with some of the "nice" image and being more assertive. For example, the vote against Iran in the recent past thus burying the prospects of a Indo-Iranian gas pipeline project was such a move. Such moves will result in strong reactions internationally (may be also internally) and India's public diplomacy strategists are likely to have their hands full.
The New York Times in an editorial - "Secretary Clinton goes to India" ( July 17, 2009) - on US Secretary of State Hilary Clinton's visit to India said, "India wants to be seen as a major world power. For that to happen, it will have to drop its pretensions to nonalignment and stake out strong and constructive positions." The US wants India to take clear stands on international issues especially with a strong government in power now. The same newspaper in an earlier editorial - India's challenges - (May 18, 2009) had called for India to "use its considerable trade clout with Iran, Sudan and Myanmar to curb Tehran’s nuclear program, end the genocide in Darfur and press Myanmar’s junta to expand human rights."
With power comes responsibility. India's public diplomacy will have to be geared towards serving country's strategic interests and not just present a "fluffed up" image of the country. The US has done it very successfully by "owning" the "themes" of freedom and democracy and using these in all their communications to advance national interests.