Just about any traveler needs a visa to enter India. It is a pain, and is the first exposure most people get to the bureaucratic processes here. A recent BBC report on travelling in India snidely thanked the Indian embassies abroad for keeping the number of tourists down so that the intrepid could enjoy an undiscovered country. In truth, the government here advocates increased tourism, (it's a major foreign exchange earner and source of employment) but the bureaucratic legacy and a lingering fear of foreigners seem to get in the way.
India's neighbours (Thailand, Singapore, Malaysia, Indonesia, etc.) compete much more successfully in the tourism arena. They give citizens of a large number of countries an automatic one-month visa on arrival. Only longer visits require a visa, though sometimes extensions are granted inside the country with the payment of a fee. (In Thailand, there is a five dollar a day fine for overstaying) India should consider some similar program, especially as an increasing number of tourists are winging in on charter flights and coming for shorter trips.
The Indian government seems to have missed the fact that the makeup of Western tourists to India has changed. In the past, though the government went to great lengths to attract a moneyed group of tourists, it was mostly young, hippie travelers that wandered the country on the cheap for months or even years at a time. Today, though there are still a lot of these ultra-budget travelers, India is attracting a growing group of visitors, old and young, who take in one area of the country at a time, on short holiday breaks. These tourists, though not flaunting the overly fat wallets the government dreams of, spend well and travel widely. They tend to frequent the mid-range hotels and visit out of the way tourist spots, spreading their financial contribution more widely among the population. The government needs to rethink its policies toward such travelers.
Make sure you check with an Indian embassy or consulate near you about what visa you should get, then arrange for it. If there is no Indian Consulate in your town, you may have to send off your passport in the mail, fill out various forms, and pay a fee. It is easiest if you apply in your home country since, if you are on the road already, you may have to pay extra charges for for "clearance" from the Indian embassy in your home country. If you will be travelling a while before fax arriving in India, make sure your visa will be valid when you arrive.
Get a long visa
For many reasons, India catches the imagination of travelers and, once here, some are reluctant to leave when they intended to. Get a visa for longer than you think you'll need as it is difficult, sometimes impossible, to extend one once you are here. Even the Indian embassies in countries neighboring India may be reluctant to issue another visa if you recently left India.
Ask for a multiple entry visa, since an exit to Nepal or Sri Lanka will cancel a single entry visa, even if there is a lot of time left on it. Even if you plan to only visit India you may want to get a multiple entry stamp since many people's plans change when they get here. In the heat of the summer, a quick trip to Nepal may sound refreshing. Or you meet someone who is heading off to Sri Lanka or the Maldives. (Wanna come along?)
Visas to India are subject to restrictions that the Government changes periodically. Depending on political situations, insurgencies, border tensions, or whatever, some area or another may be off limits to foreigners. As a rule it is not a major hardship as most people wouldn't want to be traveling there anyway. Any current guide book will keep you up dated as to where you shouldn't go. And should you want to sneak in, just for the hell of it, don't. The government, army, or whoever catches you will not be amused, or very friendly.
Drugs and the Law
For the traveler coming to India to recreate the freewheeling days of the Sixties, a few words of warning. Indian drug laws have undergone considerable change. There is now a MANDATORY TEN-YEAR SENTENCE for possession of even small amounts of drugs. More than a few foreigners languish in Indian jails on drug charges.
Other Official Stuff
As mentioned, India loves its bureaucracy. Travelers encounter bureaucratic paper shuffling that ranges from the quaint to the comical. And occasionally the offensive. For example, the odious Foreigner's Registration Form that foreign travelers fill in at every hotel is based on the Foreigner's Registration Act of 1939 - a harsh act the war-time British Government enacted to track enemy aliens. The government claims it is still necessary to control "unfriendly visitors" (read Pakistani agents) and spends a great deal of time, energy and paperwork in this monitoring process. However, I suspect that such agents (rife in India by some newspapers' accounts) can easily pass as Indian citizens. So can Indians who have taken citizenship in other countries. The regulation now basically targets and tracks visible foreigners from Western countries. Ironically, these are the very visitors the government wants to encourage.
If you come to India on a visa other than "Tourist", you may be required to register with the local authorities after 6 months. This involves a visit to the local "Foreigner's Registration Office" and, of course, more bureaucracy. In the past, few foreigners lived long-term in India, and most of these worked as missionaries. The government kept a close watch on them. These days, though there are still comparatively few foreigners living here, most are involved in some kind of business activity. Of course, the bureaucracy continues.
If you stay in India longer than two years, you will be required to take an AIDS test. It is not clear whether this is because you may have brought the disease with you (then why wait two years to test someone?) or because you'll have had enough time to catch it here (India is one of the countries with the fastest growing AIDS population). Unfortunately, this test must be taken at a Government Hospital, which may actually increase your risk factor.