As already mentioned in the dev blog, 2.5 million Indians
volunteered to fight in WW2, more than any country in history. In addition to India's contributions in North Africa and Burma, the Indian contingent was also the third largest force in Italy during it's liberation.
Economically too, India was somewhat important, as can be seen from the GDP data below (figures in 1990 Geary-Khamis million dollars, which basically means US dollars adjusted for purchasing power parity). Now I admit most of India's production was NOT geared towards the war (mostly food and cash crops I guess but more industry than China in the 1940s) but that is the point of the game isn't it? The game gives you the historical position as of the start date (1936 or 1939) and then it's up to you to make what you can of it.
I am not saying that India was a major participant in the war when compared with Germany, the USSR, the US, the UK, Japan or even China. But if you want to play outside of those countries, India can provide the most gameplay value (sorry Canada and Australia - I love you but your manpower is just... too low!).
The reason Gandhi, Nehru and most of the major Indian leaders sided with the Allies was because they were already aiming for a democratic India. The British had promised India Independence if they fought alongside them and this was preferable to the Indians as compared to a new non-democratic imperial overlord (Japan). Compared to the 2.5 million Indians who fought for the Allies, only 40K prisoners of war eventually joined the Japanese backed Azad-Hind-Fauj under Subhash Chandra Bose.
Bose eventually did take some Indian territory from the British like the Andaman islands and small portions of NE India. This raises some interesting gameplay choices for the Indian player. What if the player decides to back Bose and take more Indian territory? What if the UK capitulates? Will Churchill and his "...
Empire beyond the seas, armed and guarded by the British Fleet, carry on the struggle...” Or was Hitler right in saying that,
"...whatever be the methods chosen, the Indians are unanimous in their desire to shake off the British yoke."
To find out, play HoI IV: TfV !!