While insisting that India has no censorship, the government has shown unusual sensitivity to press coverage to Hindu-Moslem clashes that recently have rocked this country. It has refused to transmit a United Press International photo and has seized copies of a Hindi-language newspaper.

At the same time, the largely Moslem state of Jammu and Kashmir on the Pakistan border, where the Indian Army and residents clashed last month, issued strict new rules against inciting riots. The penalaties against offending newsmen could go as high as life imprisonment.

"This is the first blow against freedom of the press," said Ajay Singh, the chief editor of the Hindi-language weekly, Asli Bharat (Real India), which was seized by police because of its coverage of Moslem-'indu clashes in Moradabad, city in Uttar Pradesh state where the violence began. More than 150 people were killed throughout the country in the violence.

Prime Minister Indira Gandhi signaled her belief that the Indian press owed its first loyalty to the country in a speech last week to newspaper editors in which she asked; "Do you want to build our country? Is it more important to secure scoops? What are your priorities?"

Gandhi clamped strick censorship on Indian press and foreign correspondents during her 17 months of emergency rule that was ended when she was defeated for reelection in March 1977. After being our of power for 33 months, her Congress-I (for Indira) Party won a landslide victory at the polls in December.

India's principal information officer, Whilfred Lazarus, insisted that there is no censorship "as far as the government of India is concerned."

He said the UPI photo, showing three pigs rooting around a shroud covered corpse in Moradabad, was not transmitted by the government's overseas communications center because it violated laws against inciting riots.

The Moradabad riots started Aug. 13 when a pig -- considered unclean by Moslems -- was reported to have run into a Moslem prayer area. Police, largerly Hindu, did nothing about it and the Moslem-police clashes later enlarged to full-fledged Hindu-Moslem communal riots and spread to other parts of the country.

The disturbances were the most wide-spread sectarian clashes in more than a decade.

Besides being worried that the riots would spread even further through India's minority Moslem population -- the third largest of any nation in the world -- officials of the Gandhi government feared the disturbances would hurt the image it has cultivated with the oil-rich Islamic countries of the Persian Gulf.

Lazarus, in explaining how a photograph being transmitted outside the country could incite Indians to riot, acknowledged the government was concerned that it could "alienate" Moslem countries.

Moreover, India filed an official protest with the neighboring Pakistani government about press coverage there, which called the riots an anti-Moslem "pogrom" by Hindus, and what New Delhi considered interferance by Pakistani President Mohammed Zia ul-Hag, who convened a high-level meeting in Islamabad to discuss India's riots. Pakistan has a majority Moslem population.

The times of India in an editorial today called Pakistan's reation "a campaign of hatred and calumny that foreign office in Islamabad and the rigidly controlled Pakistan media have unleashed."

Domestically, Gandhi was clear in calling on India's editors to show restraint in the coverage of the riots, which are often coyly described as clashes between minority and majority groups instead of spelling out that they are Hindu versus Moslem.

She said there are some areas where "it is obvious that the press is playing a major role not to bring peace and quiet but to excite people."

In what many observers here took an an ominous warning, she asked if freedom of the press "is more important than freedom of the country."

Asli Bharat, which had copies seized, is published by an organization closely linked to the opposition Lok Dal Pary. Police said they seized the paper Saturday because of "objectionable photographs of corpses" in Moradabad.

Singh, the paper's editor who along with publisher O.P Melherotra posted bond in anticipation of criminal charges being filed, called the seizure of the copies "a clear case of political vendetta."

He said that all the pictures in the paper had already appeared in other publications and that the thrust of the main page-one story was an appeal for communal peace.

Meanwhile, the Kashmir Union of Working Journalists issued a statement opposing the new rules there on news reporting for giving the executive branch "arbitrary powers which could be used to intimidate and browbeat the press."

Authorities in Kashmir, however, citied what they considered the "destructive" role of some papers that printed special editions after violence broke out in the state capital of Srinagar last month.