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It was considered, actively debated at the political level, and the subject of a great deal of lobbying, protest, and other action. In the event, the status was withheld in 1931 and for many years subsequently. India and Pakistan became independent Dominions in 1947, and shed Dominion status not many years later.
"Dominion" was not a unified concept until the Statute of Westminster, which is to say that although there were various Dominions, they were all legally different from one another, and different from other Imperial territories such as India. There were also other colonies, protectorates and possessions with even less independence. In the case of India, the position was legally complex due to factors like the interrelationships between the British authorities and the princely states, and politically complex since many people in India fundamentally did not want to be ruled by Britain.
The 1931 Statute gave certain rights and powers to the listed Dominions, effectively putting them all on the same basis. They could make their own laws, including those having extraterritorial effect, regardless of whether their laws contradicted UK law; and the Parliament of the UK could not legislate for them without their consent. Changes to the royal succession are not explicitly mentioned, but
Had India been in the list, it would have gained the same powers to make its own law, independently of UK law. And so a pragmatic argument against Dominion status, from the Imperial point of view, was made by Winston Churchill (HC Deb 20 Nov 1931 col 1198) as:
"No-one can doubt that Dominion status as defined in this Bill would be incompatible with the slightest semblance of Imperial authority over the races, the peoples and the States of the vast sub-continent of India."
Like many other so-called "diehards", he doubted whether India was capable of self-rule at all, and it was clear that a more independent India would make use of its power to act in its own interests rather than Britain's. But there were several efforts over this period at carving out some modified form of Imperial governance in India, and of course the Indian independence movement on the other hand.
In 1930, the Simon Commission had proposed various structural reforms in Indian provincial government, but stopped short of recommending Dominion status, despite pressure to address the issue; it eventually concluded that there was no consensus within India about what system should replace the 1919 settlement. Talks were ongoing, eventually reaching the proposal of the Government of India Act in 1935, which still did not give Dominion-equivalent legislative power to India - see e.g. part V chapter II.
At the same time, the Indian National Congress and allied parties formed their own group to draw up an alternative report, the "Nehru Report" of 1929, which proposed Dominion status in its very first article:
India shall have the same constitutional status in the community of nations, known as the British Empire, as the Dominion of Canada, the Commonwealth of Australia, the Dominion of New Zealand, the Union of South Africa and the Irish Free State, with a Parliament having powers to make laws for the peace, order and good government of India, and an executive responsible to that Parliament; and shall be styled and known as the Commonwealth of India.
This represented the common position of its principal author Motilal Nehru, and other notables such as Jawaharlal Nehru, Subash Chandra Bose, and Mohandas Gandhi. In January 1929, the younger Nehru also declared the Congress's goal of full independence. Muhammed Ali Jinnah, while opposing much of both reports, also endorsed Dominion status privately to the UK government as a preferable alternative to independence on Congress's terms. Outside of this "official" lobbying, there was also an ongoing degree of civil unrest; other political factions held stronger independence or anti-British views.
So in 1931, regarding the passage of the Statute of Westminster through the UK Parliament, India was not really in the same political position as Canada or Australia. There were other ongoing processes about its status, and so it was palatable to say that the question would be answered another day. Even the Balfour declaration recognized that the can was being kicked down the road in many respects: there was an idea of developing an Imperial Constitution, but no formal basis for what such a thing might contain, nor any certainty about whether the Empire/Commonwealth had enough political unity to make that viable.
Delaying the determination was a compromise position that allowed some progress to be made for the status of the Dominions, given the intensely strong and opposite feelings about the status of India. Ultimately, the can could not be kicked very far.
The delegation for India at the Imperial Conference consisted of Conservative politician F. E. Smith (the Secretary of State for India), Bijay Chand Mahtab (the Maharajadhiraja Bahadur of Burdwan Raj and a British loyalist), Walter Kirke (Deputy Chief of the Imperial General Staff for India), and civil servants from the British government in India. None of these people were in favour of independence, and were very much representing British rule in India, as opposed to representing India as such.
The question also asks whether India might have been consulted in 1936 regarding the abdication of Edward VIII. At this time, the UK Parliament was the sole authority able to legislate for India on the succession; such issues were excluded by the Government of India Act 1915, as well as by its 1935 replacement had it been brought into force. Any concurring legislation in India would have been ultra vires. If the Indian legislature were invited to do so anyway, that would have raised the prospect of India making other constitutional laws of its own devising, something that the British authorities would not have wanted. They would certainly have been aware of the strand of thinking in the Indian independence movement that all links with the Crown should be severed (as indeed happened in India in 1950 and Pakistan in 1956), and resentment over the title "Emperor of India" (dropped in 1948).
There may have been consultation with the Governor-General (the Earl of Willingdon, known for imprisoning Gandhi and tens of thousands of others) or the Secretary of State (the Marquess of Zetland, who favoured Dominion status for India), but there was no question of asking for their permission to act.