Tipping is not mandatory in India especialy in mid scale service establishments. In upscale sevice establishments (4-5 start hotels, expensive restaurants, Hertz, Avis etc) it is more the matter of mannerism than a rule. All the people working in these places get salaries. I have never seen any improved service after paying the tip and bad serive for not doing so.

In India, I especially like tipping in mid scale sector becuase many of these guys make less than minimum wages and have to support larger families and I would like to encourage them to continue making an honest living. If I can pay 15% tip in US to the students why not these poor guys who see no light at the end of the tunnel.

I never pay a penny to Airlines porters at the airport, I say no and if they still insist its their time. Airlines pay them more than minimum wages for sure.

I tip only the guy who brings my bags to the hotel room 20-40INR.
I generally don't pay anything to the driver who drops me to the airport. But paying 20-40INR won't hurt.
Nothing to guys who bring me water in my room or delivers any utilities. The only exception in in room service for which I pay 5% of the bill with minimum bing 20INR and max 50INR.
For local taxi only the fare. No tips.
For full day / 8 hour taxi between 50-100INR depending on the service and attitude. My observation is that most of them don't expect it from Indians (a lot of times I have seen them coming back to return the excess money paid by an Indian, only to be explained that it is tip) but seeing an outsider (aka foreigner) they start expecting it. I also make it a point to pay about 40INR each for the lunch or dinner or both if they are with me during that time and they do expect it.
In restaurants, in a mid scale place I tip 5-7% and in upscale place 7-10% up to 200INR max.