In ME too its illegal watching it. Howver in UK no chance as Indian sats have no footprint over their.
Tata Sky, DISHTV etc don't specifically need to own the satellites which they employ to deliver services - that would be cost prohibative, and so often they don't. Additionally, there are several "generic" satellites which carry channels from a variety of countries, including India, and in some cases can be fed from one of those regional providers which covers a number of countries.
It's not technically illegal to receive or watch these channels, so long as it's not done by say, cracking the encryption or falsifying the keycard or whatever - otherwise in theory, it would be perfectly legal to watch channels from an Indian DTH provider in Pakistan, Afghanistan, Bangladesh or whereever so long as the account is valid, the only thing is, it is probably illegal or otherwise not allowed to take the necessary receivers/keycards etc out of India which makes the theory redundant.
To answer the OP's question, I would imagine that, due to the population of migrants from the subcontinent, Sky (being a UK company) or some other DTH provider (perhaps a specialist one?) has Indian channels available.
---------- Post added at 07:45 AM ---------- Previous post was at 07:36 AM ----------
A quick
Google search for "Indian Channels UK" revealed these as the top 2 results:
Free to Air Indian Channels on Sky - Freesat - Digital Spy Forums
Apparently there is something called Freesat (which will be one of those generic satellite feeds I was talking about) which has unencrypted free-to-air Indian channels.
LyngSat - Lyngemark Satellite has a fairly detailed listing of which channels are carried by which satellite, so if you can tune your dish to a particular satellite, then the various INSAT, MEASAT and EUROBIRD satellites seem to carry a number of both FTA and subscription channels.