I assume, stuck between a rock and a hard place, they decided that compromising with censorship was not an option, while probably hoping that the headline "Reuters removes article" would have somewhat of a striesand effect. If that was the case it seems to have worked as we're here talking about it.

Maybe, I guess it depends on the feasibility of doing that quickly. If they need to do a lot of setup for it then there might not be time

I'd be willing to bet it has less to do with the article not being available in India and that it is available at all. Let's be honest, geoblocking is a joke, especially for a news outlet. Therefore, if Reuters wants to do business in India, one of the world's largest markets, they have to take it down everywhere. Now, if I ran a news service that wrote an article they didn't like and since I'm not doing business in India, I would have the power to tell them to go pound sand. Assuming they didn't decide to go the route of burying me in legal fees here in America by hiring American lawyers to do so, that is.