What's the share of Muslims in the Indian army?
Their main threat is Muslim Pakistan, so Muslim units would probably be ill-motivated while mixed troops would be not very cohesive.
The border with China could be guarded by Muslim Indian army troops, but said border is mountainous just as the critical sections of the border with Pakistan.
Furthermore, "'Muslim' customs barely exist at all. What people perceive as 'Muslim' customs are usually regional / ethnical customs whose more oppressive parts are being 'justified' by reference to religion.
Lots of people in Africa believe you need to cut off genitals from girls because of Muslim faith or they need to hide their faces when neither is true. Ironically, there's often a neighbouring ethnic with the same religion and different if not mirrored customs. Some tribes for example think that covering the face is a male privilege (IIRC the Imuhagh aka Touaregs).
Besides, what would protect our occupation troops from the Muslim Indian sensibilities if the custom incompatibility was really about spiritual issues?
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