Going back to the OP's original routing. They will require a Visa (unless they are Nepal/Bhutan citizens) because they have a domestic sector. They need to enter the country (from an immigration point of view) to fly the domestic sector. If it was International to International, then no visa would be required as you are not entering India.

now moving onto some other points raised. The Indian High commission (for those in commonwealth countries)/Embassy was/still is a pain in the backside but getting the visa is a mere formality. You may have to take a day off work/mail off the passport/wait a week or whatever but...

...it is a much simpler process than what the western countries make Indian citizens do when they they apply for visas. a few examples: The US embassy fingerprints/scrutinizes peoples application left right and centres/makes them book and appointment/wait a few weeks etc etc. When collecting visas from the embassy, the people are told not to bring wallets/credit cards/mobile phones etc etc. These people have to wait outside in queues and in the sun.

at the end of the day, no one can complain about the way the Indian embassy treats people when we treat Indians badly in our embassies in India.

At the end of the day, we want to travel to their country and we have to meet their requirements not the other way round.

but a piece of advice for anyone with Indian ancestry, get a Overseas Citizenship of Indian certificate. It is cost effective if travelling to India on a regular basis and it is issued on a lifetime basis so the trips to the Indian High Commission are confined to history!