YouTube now supports offline video viewing, but there are a lot of catches
In the meantime, it was announced that YouTube fans in India will be able to save video clips for offline viewing as a part of the Android One initiative. Well, it might be long overdue, but it seems that this functionality is now a go, as numerous reports claim that YouTube users in certain regions can save videos for later viewing, when there's no internet connectivity at hand. The supported regions are India and, reportedly, the Philippines.
Numerous reports suggest that this feature is location-based and is not part of a update for the Android and iOS versions of YouTube. Provided that you are in said regions, an icon will appear in the info section of any given YouTube video. you can also choose the video's quality. After you've downloaded a clip, it will be available for up to 48 hours in a dedicated section inside the app. There's no word when (or whether) this feature will roll out for YouTube' users outside the supported regions, mind you.
source: Android Police, Labnol