Homosexuality remains frowned upon in India, and the law actively outlaws sexual acts between men (although gay women do not attract this prejudicial legislation). On the other hand, Indian men are a great deal more affectionate with one another than they are with women in public, and you'll frequently see men walking hand-in-hand, arm-in-arm, and embracing, though this is said to be an act of "brotherliness" without any sexual connotation. Recent high-profile cases have brought the issue of gay and lesbian rights into the social and political sphere, and there is increased awareness in this regard. Nevertheless, discretion is probably best observed outside your hotel room (note that no one questions same sex travelers sharing a room).
A useful website is www.gaybombay.org, which offers information on gay venues in Mumbai. For more information and gay- and lesbian-friendly contacts nationwide, write to friend@gaybombay.org or Bombay Dost (105A Veena-Beena Shopping Centre, Bandra Station Rd., Bandra, Mumbai, 400 050); or to the Gay Info Centre (P.O. Box 1662 Secunderabad HPO 500 003, Andhra Pradesh).