India wants none of that Google Street View business
Official governmental sources, quoted by the Press Trust of India, claim that the rejection came after a detailed analysis by security agencies and defence forces which feel that allowing Google to cover India would compromise country's security interest:
India is not the only country to shun away from Google Street View. Back in 2010, Austria barred Google's mapping efforts, because citizens were unhappy with the camera-loaded cars snooping around. Although the ban was lifted in the following year, Google has not yet expressed any desire to bring Austria to Street View.
Source: Press Trust of India via AndroidCentral