Yes, it is true that Indian Navy/Coast Guard protects and also helpfully escorts maritime around that area [1].
It also protects the original untouched Sentinalese[2] tribes off the Andaman & Nicobar islands on the other side. Historically, our country has NEVER gone and attacked anyone in the past 3000 years. Sometimes because of our own resilience and other times because of our stupid prime minister.
[1] http://news.bbc.co.uk/2/hi/7736885.stm
[2] http://en.wikipedia.org/wiki/North_Sentinel_Island
> licence Raj, the paperwork kingdom, that ruins business opportunities all across India.
You're bang on this one. It's those 50-60 odd corrupt assholes on the top which make life hell for the rest of the population. Pretty similar to how things are here in the US, albeit the corruption part(?). Only magnified.