The problem is that it would be highly controversial among Indians.

Indians are very... nationalist. I genuinely haven't seen any people this nationalist ever. Spend sometime on the internet arguing with Indians and you will realise that they (not all, but most) get offended over anything that criticises India even if it is right and they get vile to defend India. India is like an accepted China when it comes to nationalism and propaganda.

A game set in historical India if it portrays some groups as bad, then expect some riots. It is so bad that some (a lot) Indians still dispute the defeat of Porus by Alexander. They think it is British propaganda and that there is no way a mighty 'Indian' king could ever have been defeated. Nationalism is that bad in India.

Ubisoft has to either be PC or accept the chance of angering nationalists. Judging by how history was portrayed in Odyssey, I think they would go for the PC route.