Is "free" == "good"?
Parallel: food aid? Notwithstanding the edge case of famine, nothing destroys local farming quite as effectively as low-cost food dumped into a poverty-stricken country.
A western-owned company offering "free" internet will effectively kill any Indian company that might have wanted to establish a business in the "low-cost" internet provision space. Keeping Facebook out will encourage local industry and innovation.
Could a "manipulation" story be written around the decision? Yes. Could the decision have been reached for reasons that are entirely beyond the sphere of the imputed manipulation? Also yes.
Ultimately, wide-scale internet access is India's problem. If India wants help, it surely has a voice to ask. And if it rejects an offer, I'm willing to consider the possibility that the decision-makers might be wise enough to have made their own decisions.