What's wrong with this? They're not preventing you from paying for Internet access, they're offering some access for free. People in India are free to start competing ISPs.
You're couching your defence of this in free market terms, but the truth is that for customers of this ISP these web sites no longer exist in a free market for Internet services. They have managed to skew the market in their favour by artificially lowering the overall cost of using their services and artificially raising the cost of connecting to competing services. You can't have your free market cake on one end of…
How so? Anybody is free to start an ISP that doesn't do this. The existence of this ISP does not prevent anyone from starting their own. There is absolutely a free market in ISPs, and the only thing that would prevent a competing ISP is the government (by denying a license) - not Reliance Communications Ltd
> They have managed to skew the market in their favour by artificially lowering the overall cost of using their services and artificially raising the cost of connecting to competing services.
There's nothing artificial about it. McDonald's selling a burger for $1 doesn't prevent anyone from selling burgers at that price or a lower price. If McDonald's gives burgers away for free, that does not prevent anyone else from doing the same.
> You can't have your free market cake on one end of the argument and eat it on the other.
I'm not sure what you mean by free market as you use the term. The fact that its hard to compete against McDonalds (or Reliance Communications) doesn't mean others aren't free to compete.
> you have an industry cartel that has stitched up the market to divide it up between themselves.
Yet other investors and entrepreneurs are free to eat their lunch... unless gasp consumers actually like what they're being offered more than the alternatives you're personally interested in.