"The officials say it is not a question of censorship, but of the necessity to operate within the laws of the country. "
Any action that blocks or removes something, is 'Censorship'! I understand Google, Facebook and other's desire to have and keep their user base, but bowing to the whims of any Country in the aspect of censoring content of any kind, goes against the right of Freedom that entails what the Internet is today.
Personally I'd tell India to go F-off a,d watch as their population rises up because they cannot have their Facebook, Youtube or whatever.
Do not under-estimate the power of material power over people.