Pictures of dozens of women had been used without their consent and doctored to create an open source app called 'Bulli Bai' - a derogatory term to describe Muslim women - on the GitHub platform before it was taken down.
Police in the western city of Mumbai, which is investigating the case, said they had arrested three people, two 21-year-old men and an 18-year-old woman.
"We are investigating whether this was a part of a larger conspiracy," Mumbai's Police Commissioner Hemant Nagrale told reporters.
Among those targeted were several Indian Muslim journalists, including Ismat Ara who filed and then shared on social media a police complaint that said the app was "clearly aimed at insulting Muslim women".
Muslims make up around 14 percent of India's 1.3 billion population, and sections of the minority community have been at odds with Prime Minister Narendra Modi's government and its Hindu right-wing supporters, including over a controversial 2019 citizenship law that triggered large-scale protests.
Media watchdog Reporters Without Borders (RSF) described the app as "absolutely chilling" and urged Indian authorities to take action.
"To do nothing would be to condone an extremely violent form of harassment, a form of intimidation that discriminates against an entire sector of the journalistic community and exposes those targeted to potential physical attacks," RSF's Daniel Bastard said.
The GitHub platform shut down a similar app last year that had used pictures of Indian Muslim women.