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could you follow the steps here: https://www.pulumi.com/docs/troubleshooting/ and then open an issue with any verbose logs

Thanks for the suggestion! From my verbose logs, this is what I see as given below.

I1229 11:14:57.185113   26811 rpc.go:74] Marshaling property for RPC[Provider[azure-native, 0xc0000b17a0].Configure().inputs]: clientId={XXXXXXXXXX}
I1229 11:14:57.185126   26811 rpc.go:74] Marshaling property for RPC[Provider[azure-native, 0xc0000b17a0].Configure().inputs]: clientSecret={XXXXXXXXXXXXX}
I1229 11:14:57.185138   26811 rpc.go:74] Marshaling property for RPC[Provider[azure-native, 0xc0000b17a0].Configure().inputs]: 4dabf18193072939515e22adb298388d={1b47061264138c4ac30d75fd1eb44270}
I1229 11:14:57.185147   26811 rpc.go:74] Marshaling property for RPC[Provider[azure-native, 0xc0000b17a0].Configure().inputs]: value={ZIWnLF7vDwKnEP37ba_3VxpIPksbUq4udz}
I1229 11:14:57.185153   26811 rpc.go:74] Marshaling property for RPC[Provider[azure-native, 0xc0000b17a0].Configure().inputs]: environment={public}
I1229 11:14:57.185159   26811 rpc.go:74] Marshaling property for RPC[Provider[azure-native, 0xc0000b17a0].Configure().inputs]: location={westeurope}
I1229 11:14:57.185164   26811 rpc.go:74] Marshaling property for RPC[Provider[azure-native, 0xc0000b17a0].Configure().inputs]: subscriptionId={32eb8002-e2a2-4a86-9b50-a8c0922c313b}
I1229 11:14:57.185170   26811 rpc.go:74] Marshaling property for RPC[Provider[azure-native, 0xc0000b17a0].Configure().inputs]: tenantId={d3d38dff-f85c-4026-842d-c215eb6b3560}
I1229 11:14:57.185180   26811 registry.go:136] loaded provider urn:pulumi:ag-test::application-gateway::pulumi:providers:azure-native::default::8afa3da4-f171-49ac-b261-e9ac465594c2
I1229 11:14:57.185192   26811 registry.go:101] provider(urn:pulumi:ag-test::application-gateway::azure-native:network:ApplicationGateway::ag-test-3dk): urn:pulumi:ag-test::application-gateway::pulumi:providers:azure-native::default::8afa3da4-f171-49ac-b261-e9ac465594c2
I1229 11:14:57.185597   26811 step_generator.go:900] stepGenerator.GeneratePendingDeletes(): scanning previous snapshot for pending deletes
I1229 11:14:57.185617   26811 deployment_executor.go:400] deploymentExecutor.retirePendingDeletes(...): no pending deletions
I1229 11:14:57.185631   26811 langruntime_plugin.go:168] langhost[nodejs].Run(pwd=/Users/veerasamy001/Projects/Pulumi/tre-azure-spoke-dk/packages/application-gateway/src,program=.,#args=0,proj=application-gateway,stack=ag-test,#config=8,dryrun=true) executing
I1229 11:14:57.185650   26811 step_executor.go:326] StepExecutor worker(-2): worker coming online
I1229 11:14:57.185662   26811 step_executor.go:326] StepExecutor worker(-2): worker waiting for incoming chains
I1229 11:14:57.185637   26811 deployment_executor.go:221] deploymentExecutor.Execute(...): waiting for incoming events
I1229 11:14:57.186097   26811 eventsink.go:59] 2021/12/29 11:14:57 Testing if Service Principal / Client Certificate is applicable for Authentication..
I1229 11:14:57.186113   26811 eventsink.go:62] eventSink::Debug(<{%reset%}>2021/12/29 11:14:57 Testing if Service Principal / Client Certificate is applicable for Authentication..<{%reset%}>)
I1229 11:14:57.186375   26811 eventsink.go:59] 2021/12/29 11:14:57 Testing if Multi Tenant Service Principal / Client Secret is applicable for Authentication..
I1229 11:14:57.186398   26811 eventsink.go:62] eventSink::Debug(<{%reset%}>2021/12/29 11:14:57 Testing if Multi Tenant Service Principal / Client Secret is applicable for Authentication..<{%reset%}>)
I1229 11:14:57.186572   26811 eventsink.go:59] 2021/12/29 11:14:57 Testing if Service Principal / Client Secret is applicable for Authentication..
I1229 11:14:57.186590   26811 eventsink.go:62] eventSink::Debug(<{%reset%}>2021/12/29 11:14:57 Testing if Service Principal / Client Secret is applicable for Authentication..<{%reset%}>)
I1229 11:14:57.186770   26811 eventsink.go:59] 2021/12/29 11:14:57 Using Service Principal / Client Secret for Authentication
I1229 11:14:57.186785   26811 eventsink.go:62] eventSink::Debug(<{%reset%}>2021/12/29 11:14:57 Using Service Principal / Client Secret for Authentication<{%reset%}>)
I1229 11:14:57.187001   26811 eventsink.go:59] 2021/12/29 11:14:57 Getting OAuth config for endpoint <https://login.microsoftonline.com/> with  tenant d3d38dff-f85c-4026-842d-c215eb6b3560
I1229 11:14:57.187021   26811 eventsink.go:62] eventSink::Debug(<{%reset%}>2021/12/29 11:14:57 Getting OAuth config for endpoint <https://login.microsoftonline.com/> with  tenant d3d38dff-f85c-4026-842d-c215eb6b3560<{%reset%}>)
I1229 11:14:57.192854   26811 langruntime_plugin.go:200] langhost[nodejs].RunPlan(pwd=/Users/veerasamy001/Projects/Pulumi/tre-azure-spoke-dk/packages/application-gateway/src,program=.,...,dryrun=true) success: progerr=Problem executing program (could not run language executor): fork/exec /usr/local/bin/node: argument list too long
I1229 11:14:57.194191   26811 source_eval.go:184] EvalSourceIterator ended with an error: an unhandled error occurred: Problem executing program (could not run language executor): fork/exec /usr/local/bin/node: argument list too long
I1229 11:14:57.194219   26811 deployment_executor.go:225] deploymentExecutor.Execute(...): incoming event (nil? true, Error: an unhandled error occurred: Problem executing program (could not run language executor): fork/exec /usr/local/bin/node: argument list too long)
I1229 11:14:57.194241   26811 eventsink.go:86] eventSink::Error(<{%reset%}>an unhandled error occurred: Problem executing program (could not run language executor): fork/exec /usr/local/bin/node: argument list too long<{%reset%}>)
I1229 11:14:57.194257   26811 step_executor.go:326] StepExecutor worker(-1): StepExecutor.waitForCompletion(): waiting for worker threads to exit
I1229 11:14:57.194266   26811 step_executor.go:326] StepExecutor worker(-2): worker exiting due to cancellation
I1229 11:14:57.194285   26811 step_executor.go:326] StepExecutor worker(-1): StepExecutor.waitForCompletion(): worker threads all exited
I1229 11:14:57.194295   26811 deployment_executor.go:261] deploymentExecutor.Execute(...): step executor has completed
I1229 11:14:57.194314   26811 deployment_executor.go:132] deploymentExecutor.Execute(...): exiting provider canceller
I1229 11:14:57.194412   26811 provider_plugin.go:511] Provider[azure, 0xc0030c8180].Configure() failed: err=transport is closing
I1229 11:14:57.214243   26811 ignore.go:44] Explicitly ignoring and discarding error: rpc error: code = Canceled desc = grpc: the client connection is closing
I1229 11:14:57.214291   26811 host.go:417] Error closing 'nodejs' language plugin during shutdown; ignoring: 1 error occurred:
	* operation not permitted

I1229 11:14:57.214342   26811 update.go:189] *** Update(preview=true) complete ***