Xiaomi was recently banned from selling / importing their handsets in India. It was because of Ericsson who filed a patent infringement case against the company. The Delhi High Court passed an ex parte order prohibiting Xiaomi from selling their handsets or importing them into India.
However recently Xiaomi managed to get back in business, Delhi High Court have lifted the ban on Qualcomm devices only. This means Xiaomi will be able to sell / import only Qualcomm devices for now.
This is the primary reason why Redmi 1S is on sale instead of the Redmi Note. The 1S houses a qualcomm snapdragon quad core processor. Things have changed a lot there are new handsets / brands like the Micromax Yureka that might act as a spoiler.
It would be interesting to watch what will happen today, will the 1S go out of stock within seconds?