TL;DR:
I'd hate for anyone to walk away with the idea that Indians think 'i' is acceptable. You won't find it in any respected Indian publication. You won't find the average Indian writing it down on paper. It's just textspeak and that's why it's common in text and tweets and comments online.
Detailed answer:
I’m from India. I assure you there’s no such thing as the lowercase 'i'. No grammar teacher of mine — and I've had quite a few good ones — ever so much as mentioned it. In fact, this is the first I'm hearing of it.
The tendency of Indians to write in textspeak is unfortunate, but 'i' is as erroneous as 'u'.
I'd like to point out that almost all of these violations occur in the electronic medium. Nobody writes 'i' on paper. They type it. And if there's no autocorrect, most of them can't be bothered to rectify it themselves.
How established is this practice among Indian English speakers?
Based on my experience, this is pretty established, but not so much among Indian English speakers as among Indian netizens.
Is writing i a means of circumventing the perceived limitations of the English language?
If you mean the limitations regarding the tiered system of politeness, then no. The tiered system affects more pronouns than 'I', and affects verbs and modifiers as well.
I might as well mention that Hindi's script Devanagari (or any other Indian script I'm familiar with) does not have the concept of capital and small letters. So, the question of whether this practice is a carry-over is moot in this case (unlike that of some European languages).
Can anyone confirm this practice, and/or provide a link to the aforementioned article?
Don't know about the link, but I can confirm that what you have there is a practice evolved solely for digital media. Admittedly Indians use it a bit more, but it's not exclusive to Indian English and shouldn't be considered a part of it.
I don't know what article Jeega was referring to, but that was just an opinion piece, an opinion he seemed to agree with. But it's definitely NOT a feature of Indian English. I'll eat my words if anyone can provide a shred of evidence to the contrary.
EDIT: Sumelic seems to have unearthed the article link in his answer below.
According to Wikipedia, the ampersand originated as a ligature in Roman scripts of the letters e an t to represent the Latin word et, meaning and. According to the OED, citing Longman's Magazine (1882), the name ampersand is a corruption of "and per se and," that is, the symbol means "and" all by itself. But it's not a letter and would have carried the sound "et" for Latin speakers just as it has the sound "and" for English speakers, and for both it was a shorthand for the conjunction. Apparently, printers of primers for children often printed the ampersand after zed, which gave rise to the conjecture that the symbol was part of the alphabet. I'd guess its attraction is that let printers represent the alphabet in the three lines of an equal number of symbols.
Best Answer
You're correct. We call it 'Zed', even though ZEE TV has been around for ages. We don't associate the company's name with the letter's pronunciation. Some of us aren't even aware that Americans call the letter 'Zee'.
However, 'Zee' is slowly becoming popular due to the influence of American English here. For example, people with names starting with 'Z' can be nicknamed 'Zee'. People in the software industry, (who communicate with America a lot,) may call a variable 'Zee' as against 'Zed'.