After Delhi High court’s judgment (“Like China, we will block all such websites”– Indian Government to Google and Facebook), Indian government has given a nod to prosecute Google, Facebook, Yahoo and 18 other sites for allegedly promoting enmity between classes and causing prejudice to national integration.
The Delhi court had reasoned that though “prima facie” the accused companies were liable to be summoned for promoting enmity between classes, causing prejudice to national integration and insulting religion or religious belief of any class, the summons could not be executed without the prior sanction of central or state government or the district magistrate.
Now, prosecution for these offences has been sanctioned by the government. They carry a maximum punishment of five years. The lighter charges on which the court had issued summons carried a term of three years. [source]
The government will also work with MEA (Ministry of External Affairs) to serve summons to these companies (i.e. to chairman of Facebook/Google etc).
Earlier Indian government asked Google/Facebook and other companies to manually screen content going into the system and very recently, government has asked these companies to setup local servers. The government also wants these companies to host data of Indian citizen, government organizations on Indian servers (and not move them out of the country), as part of privacy measure.