In October 2014, five months after Narendra Modi was first elected as the prime minister of India, he claimed that the legend of the Hindu god Ganesha – whose elephant head was affixed to a human body – proved that cosmetic surgery existed in ancient India. Not long after, a retired pilot instructor, Anand Bodas, presented a joint research paper at the Indian Science Congress in Mumbai asserting that the repeated mentions of chariots and flying machines in ancient Sanskrit epics proved that aircrafts and drones were being developed in the Indian subcontinent 7,000 years ago.

Over the past decade of Modi’s rule, the country’s history has been embellished with visions of a fantastic, and technologically advanced, Hindu past. For the ruling Bharatiya Janata party (BJP), history and mythology are one and the same: the land south of the Himalayas was once a prelapsarian Hindu arcadia, which led the world in economic growth and scientific research. Our temples were apparently awash with gold; and 20th-century breakthroughs of western science such as stem-cell research and nuclear fission were all pioneered in India millennia ago. This fabled paradise was inevitably sullied by the arrival of “outsiders”: Hindu supremacists have consistently maintained that bloodthirsty Muslim invaders ran riot across the country from the 11th century onwards, massacring millions, destroying temples and universities.

The subtitle of William Dalrymple’s The Golden Road – How Ancient India Transformed the World – would be catnip to Modi’s Hindu nationalist proponents. Dalrymple, who has been on the receiving end of rightwing ire for his previous books on the East India Company and Mughal India, here surveys how Indian goods, ideas and cultural exports were indeed at the centre of the ancient and early medieval worlds.

But he complicates the story by tracing the growth of Buddhism in the first half of the book, right from its origins as a relatively classless monastic movement that developed as a reaction to the fixed caste hierarchies of orthodox Hinduism, to its heyday as the court religion of the Tangs in seventh-century China. We read about the Indian emperor Ashoka, once a staple presence in pre-Modi Indian school textbooks, growing disillusioned after a brutal war with a rival kingdom, and becoming a Buddhist to partly assuage his guilt. Then there is the spiritedly recounted tale of Xuanzang, a seventh-century Chinese monk who trekked for six years across modern-day Afghanistan, Uzbekistan and Kashmir, and ended up in what was arguably the world’s first residential college, the sprawling Nalanda University in eastern India.

Dalrymple is enthralled by the postcard monuments of ancient India’s “soft power”: the magnificent Borobudur Buddhist temple in Indonesia; the Hindu temple Angkor Wat in Cambodia. He recounts the flourishing trade between ancient India and the Roman empire following the famous Battle of Alexandria in 30BC. Once control of the Red Sea had passed into Roman hands, exotic spices, gemstones, Indian cotton, elephant tusks, tortoise shells and even substantial numbers of caged wild animals (meant to fight in the Colosseum) were shipped straight from the south Indian coast to the Italian mainland via Egypt. He persuasively argues that this maritime trade route preceded the overland Silk Road connecting China, Turkey and the Mediterranean Sea by several centuries. The quality and volume of Indian exports can be gauged by the truckloads of Roman gold and silver coins that still turn up in the country’s archaeological sites. Infuriated by this massive wealth drain, the Roman historian Pliny the Elder once described India as “the sink of the world’s most precious metal”.

Talk to any well-off Indian boomer anywhere in the world, and sooner or later they will chew your ear off about Aryabhata, a fifth-century astronomer and mathematician who first used zero in the decimal system and also correctly concluded that the Earth rotates about its own axis. Dalrymple is at his artful best in his account of how the knowledge of several mathematical concepts and astronomical discoveries passed from ancient India to eighth-century Baghdad through an eccentric family of Muslim royal viziers who had once been rectors in a Buddhist monastery in Afghanistan. These ideas were later transmitted to Spain, which was ruled by Muslim kingdoms for much of the Middle Ages, and eventually ended up underpinning many of the scientific and intellectual achievements of the Renaissance.

It is only in the final pages that Dalrymple acknowledges the debates about Indian history that have become unavoidable in recent years. He believes that an earlier generation of post-partition “left-leaning” historians didn’t dwell much on the violent Turkish incursions into the subcontinent in the 11th and 12th centuries so as not to worsen the sectarian turbulence in a fragile new republic. Under Modi, however, “the reverse is true and the destruction of Hindu temples is almost all that many in India seem to know of the medieval period of India-Islamic history”.

Dalrymple doesn’t mention the unprecedented ways in which the current regime has marginalised India’s 200 million Muslims by characterising them as “infiltrators”, omitting references to Mughal rule in history textbooks, even renaming towns and cities that reflect the country’s long Islamic heritage. The struggle of ideas in modern India is not so much between right- and left-leaning historians, but between those who write about the past and those who aspire to rewrite the past.

• The Golden Road: How Ancient India Transformed the World by William Dalrymple is published by Bloomsbury (£30). To support the Guardian and Observer order your copy at guardianbookshop.com. Delivery charges may apply