I think John has hit the nail on the head. Can't explain any better.
There is one more related but unmentioned problem I might add - Indian TMs are not yet enforced viz domains and .co.in *might* just be a target when they are, maybe not though.
Fact #1 - LLL.in are sold out - LLL.co.in are far from it.
Fact #2 - International websites / domainers prefer .in over .co.in anyday
Fact #3 - even -ing & -ed words for .in are regged, even the basic keywords are available in .co.in
I could go on, but those thinking .co.in will beat .in in whatever sense are deluding themselves, as well as their followers.