I did some more digging. Seems like the action taken by the Government of India is not as ridiculous as it seems on surface. VLC Media Player has become an attack vector due to reasons beyond my comprehension. Contributors at VideoLan refuse to do anything about it, but continue to pretend that they have no idea why they have been banned. They blame the lax Windows security, which is a valid argument to a certain extent.
Read this thread to gain better understanding of the issue - Has Cicada's hack been corrected? - The VideoLAN Forums
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