If there’s one thing we’ve learned about Prime Minister Narendra Modi is that he’s not afraid of using radical maneuvers to accomplish his economic agenda for India.

In fact, the more ambitious the idea the better.

Barely a year and a half into office, he surprised everyone by announcing on live TV — with no previous warning — that, at midnight the same day, all 500 and 1,000 Indian rupee notes would become worthless.

What ensued next can only be described as a social meltdown, because that’s what happens when you demonetize a 1.3-billion-person strong economy that functions on cash. Businesses went bankrupt, people lost their lifesavings, some even collapsed waiting in line for the ATM.

Yet — and analysts are still baffled by this — Mr. Modi somehow emerged more popular than ever before.

Without skipping a beat, seven months later, Mr. Modi’s government passed the most sweeping tax reform in Indian history. The legislation simplified India’s knotty taxation system, and though it still needs significant fine-tuning in its implementation, Mr. Modi delivered on a three-decades-old promise from the Indian government.

In expected fashion, to start off 2018 Prime Minister Modi announced a plan to provide free health care to half a billion Indians. If launched successfully, “Modicare” will be the world’s largest health care program funded by a government.

As every other Indian, I’ve followed Mr. Modi’s reforms with bated hope. Indians truly want him to succeed in his economic agenda. They want “middle class” to actually mean something in India, because for 300 million people right now the term means making $3 a day.

They want to see corruption rooted out through a fair tax system that doesn’t burden the poor or reward the rich. They want a modern, digitized India that’s the go-to destination for global investors. And they want a secure India, safe from foreign and domestic terrorism.

But Indians wait with bated breath because there’s a real, rising threat that jeopardizes Mr. Modi’s entire agenda. Religious nationalism, which has given rise to cultural terrorism, intolerance and persecution of ethnic minorities, is causing serious damage to India’s democratic unity.

The same week Mr. Modi delivered his global investment pitch at the World Economic Forum in Davos, Switzerland, violence broke out across India — including in Mr. Modi’s home state Gujarat — over the release of a movie.

In one startling incident near New Delhi, a mob pelted stones at a school bus carrying children and teachers. The protests were ignited by a fringe group who took umbrage with the movie’s portrayal of a legendary queen.

This episode is a microcosmic example of the type of extremist ideology that’s infected India. Over the past three years, Dalits and Muslims have been killed in the name of cows, Christians have been attacked and falsely accused of performing forced religious conversions and even some Hindus, who are from the majority religion, have been threatened for not being Hindu enough.

This wave of violence by extremists groups has gained momentum since the Modi government came to power. Extremists have erased the lines between fringe and mainstream, as they ignore Mr. Modi’s call for an all-inclusive India — a call included in his Davos speech.

They define Indian identity by a narrow interpretation of what it means to be an Indian, not by a person’s irrevocable ties to the land and people he belongs to, regardless of his religious beliefs.

Religious nationalism by its very nature divides and leads to violence, as it did a few weeks ago when India celebrated Republic Day.

On the morning of Jan. 26, a band of Hindu youths in Kasganj, Uttar Pradesh marched toward a Muslim community. They carried guns, clubs and sticks, and waved Indian and saffron flags, the latter associated with far-right groups. When the two groups made contact, violence erupted. Shots went off, and cars, shops and homes were set aflame. When the dust settled, a man was dead and several more were severely injured.

That this would happen on the day when the Indian Constitution was adopted is a perverse irony. The constitution establishes that all Indians are equal and have the right to celebrate Republic Day, whatever their religion might be.

On the opposite end of India in Mumbai, a different kind of march took place. The Nationalist Congress Party opposition leader Sharad Pawar, among several opposition leaders, came together for a “Save the Constitution Rally.” The rally was called after a BJP minister threatened to change the constitution by removing “secular” from as a defining aspect of Indian democracy.

As things stand, Mr. Modi’s greatest challenge to accomplish his economic dreams is not battling corruption, digitizing India’s sprawling rural economy or getting the country’s GDP growth rate above 8 percent; it’s defending India’s democratic ideals from those who’re tearing them down.

The prime minister must work toward an India unified by a strong, composite patriotism, not an India fragmented by religious nationalism. And he must prevent the further growth and spread of cultural terrorism.

India will not realize its full potential as a world power without a strong, peaceful and free democracy. An Indiaincreasingly at war within itself because extremist groups commit violence with impunity will devolve to a violent form of mobocracy, not exactly the climate for economic investment. The fact that 7,000 of the richest Indians migrated abroad in 2017 is a telling sign of the times.

Protecting freedom of speech, religious liberty and the right of every Indian to live peacefully in his homeland should be Prime Minister Modi’s most urgent and ambitious reform.

• Joseph D’Souza is the moderating bishop of the Good Shepherd Church and Associated Ministries of India

Read more at India’s democracy and Modi’s reforms.