As a thought experiment, perhaps someone there thought not fulfilling the Indian group's request would be seen as insensitive.
I suppose the decisionmaker needs to know what societal values one has to uphold, and in which order of importance. As a wild example, if the group had demanded the women walk around in the nude, because of their religion, it'd be obvious to say no because it'd violate so many of the employees' values.
Yes, it boils down to a conflict between two cultures. And when you visit a place, the expectation should be that you will respect local culture. If you cannot do that, stay home.
