While it voted yes to the first indictment of the regime, going as far as to refer it to the ICC (to which India is not a party), the second vote dealt with specific, immediate steps to tackle the situation. As expected, the troika of the US, UK and France demanded a no-fly zone over Libya.
India very rightly abstained during the vote along with China, Russia, Brazil and Germany. It's not because Qadhafi has offered (through the media) preferential treatment to Indian companies, but because India opposes any foreign military intervention apart from that of UN Peacekeeping forces. Had it voted yes, India would have fallen into the danger of limiting its own options in the ongoing anti-Maoist operations. Moreover, it would have approved of foreign military intervention, which contradicts the most basic of India's foreign policy doctrines, Panchsheel.
However, had India voted no to the resolution, it would have been seen as though it were backing Qadhafi at a time when even the Arab league has ditched the Libyan strongman, causing International criticism and isolation. A negative vote would have made India look like a country whose foreign policy was for sale to the highest bidder.
In such a situation, India's abstention was the best thing to do. As per UNSC convention, an abstention by a non-permanent member usually means a positive vote with reservations. That is precisely India's view on the issue. While we, as a democracy, do not support dictatorships of the kind in Libya, we believe that foreign powers including India should not play a destabilizing role in affairs of other states. However, India must be careful to articulate its position carefully, lest it seem we have sold out to Qadhafi's offers, which would certainly find no favour with the Indian public.