Indian diplomacy was at its worst last week. It conducted the prime minister’s visit to the US as if he was attending a seminar on economics, in Neemrana.

If India is a superpower (perennially waiting to happen), it came across, on the one hand, as a country sapped of all energy and squabbling about petty matters while on the other, punching way above its weight (as usual), by seeking to “inform” international debate on marco-economics, political strategy and social development. When will our politicians learn to control their egos? International agendas should be set by politicos to project a short, simple and credible message, not waffle on about everything under the sun.

Iran, in sharp contrast, showed real leadership and stole the thunder. The freshness of Iran’s approach to international rapprochement and the staleness of India’s squabbling with Pakistan couldn’t have been starker. The Pakistani perception of India and its leaders, aired on Pakistani television as bumbling compromisers, unable to live up to meaningful actions was true, but humiliating.

India used to be a Banyan tree spreading its roots. Today it has become a Baobab tree. Massive from the outside, hollow from within. This is despite having the best technical talent and intellect in the world. Indians leave India to grow, get respect abroad (like Raghuran Rajan) and only then have the choice to return home to be recognized. The Indian private sector has similar constraints. Indians invest 1 percent of the GDP abroad (the real figure is higher but the IMF and the GOI do not share with us their assessment of investments abroad using hawala) because of the ease in doing business, even in nearby Bangladesh, Myanmar and Sri Lanka.

Modi spoke on Sunday, from the ramparts of Rohini in Delhi, of “small” nations leaving India behind. It seems he was referring to East Asia, which overtook India in the late 1970s. He could as well have referred to our neighbors in South Asia and Myanmar, who have more recent successes.

After Bangladesh, India is the poorest country in this region. External and internal conflict is a major growth retardant. The lengthy literature on the negative impact of conflict and violence on social capital and community well being highlights the importance we need to give to the rule of law and security. We are a country still enthralled with inherited social and ritual, class status. In this respect we are very similar to the UK and differ from our true teammate, the US. However, the US acts only in national interest. This is their ethos. You make it or break on your own. If we want to be taken seriously by the US (and the world) we have to first deal with what ails us within.

It is a crime to waste our intellectual and entrepreneurial talent overseas and be poorly served at home. It is unconscionable to spill Indian blood so casually but continue shaking hands with a Pakistani prime minister. Yes, the nations of the world will applaud this conciliatory, rational approach. But what they respect is America’s single-minded determination to “hunt and gun down” the perpetrators of violence which spilled American blood in America.

Any poor Indian looking to buy blood for an operation faces prohibitive prices and often scarcity. Why is the blood of our babus (officials) in uniform, so cheap then? Let’s value it better.

• The author is a former World Bank executive and is now a well known Economic Consultant and fiscal adviser.