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I know more than ten people who've been to India with Iridium phones and no problems. They're "technically" against the law in the same way that 80% of the adult content on the Internet is in violation of Indian law. There's all kinds of stuff that's technically illegal in India and laws that everybody ignores in daily practice. What you're looking at in that news article is the end result of a failed bribery/shakedown attempt by corrupt Indian police and a stupid white foreigner who was too dumb to know when to pay Rs1000.

I wouldn't put it in the same category as porn. Indian authorities are pretty paranoid about satellite phones since it is the preferred form of communication of terrorists. Bribing doesn't work always, especially when dealing with central-government authorities.

That's the reason for the ban?

Yes. It was discovered to be used by terrorists in the past (esp. the 2008 Mumbai attacks).

No, it's the government's excuse to crack down on foreign journalists poking their noses into places where they don't want them to go (Maoist insurgencies, for example). Getting a "burner" phone in India on GSM networks is ridiculously easy and costs about ten bucks. Actual terrorists like Laskar-e-Taiba are well aware that using a satellite phone is one of the quickest and most effective ways to get your calls listened to by the NSA. Iridium has effectively zero security and all of its calls pass through a few centralized gateways.

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