You're making the assumption that justifications offered by states, elites and institutions for their activities are based either in something that's at least partially true or at least that they believe to be true.

The first is frequently not the case: states and their officials and rulers often justify their actions while consciously knowing that what they are saying is not true. The second is more complicated, particularly in the case of imperialism, but at the very least, believing something to be true while being frequently confronted with evidence to the contrary requires some sort of systematic technique for ignoring, dismissing or suppressing those truths.

In this sense, the case of India is not dramatically different from the way Europeans after 1750 essentially set about losing or erasing knowledge of non-Western societies that they developed during their initial expansion in the early modern period, from the early 1400s to the early 1700s. The Portuguese travelling around West and Southern Africa and then onward to India in the 15th Century had no misconceptions about the numerous powerful and organized states they were encountering in the process--they knew perfectly well that many of them had long histories, sophisticated political and economic systems, complicated cultures. They weren't interested in any of that for its own sake, but they did take enough of an interest to be able to negotiate for trading rights, to establish ports or supply bases, etc. But in the case of South Asia and China they were especially under no illusion: getting to the powerful, wealthy, sophisticated states of South Asia and East Asia was the entire point both of sailing around Africa and Columbus' voyages to the Americas.

Somewhere near the end of the 18th Century, growing European dominance over the global economy plus the initial impact of industrialization plus the growth of a kind of "encyclopedic" perspective on the world among European intellectuals were all working in tandem to produce something closer to modern racism and ethnocentrism; the Atlantic slave trade and the destruction of Native American societies had also fed into this growing vision of Europeans as the only "civilized" nations in the world. It was in a great many respects a lie, and as the 19th Century went on, the lie was reinforced on every level: what early modern Europeans knew about the world (the importance of Arab scientists and philosophers in preserving and refining classical knowledge, the economic and cultural accomplishments of South and East Asian societies, etc.) was being systematically obscured, forgotten, dismissed or reframed, as was the relatively peripheral character of Western Europe in the global economy of the 8th-12th Centuries.

In the context of India specifically, the key development here is the transition between the early role of the British East India Company on the subcontinent, where it (and earlier, the Portuguese) were merely one power among many, and where many Company officials were fully cognizant of the richness and complexity of the history of various societies in the Indian subcontinent to the dominant position of the East India Company in the mid-18th Century until the Indian Mutiny in the 19th Century. That dominance encouraged officials and British governmental actors to increasingly dismiss or forget the people they controlled and their histories--the ideology increasingly drifted towards racist ideas that justified continued company and then imperial rule over India. By the late 19th Century, most imperial officials (though not all!) had convinced themselves that they were entitled to authority over Indians on the grounds of some form of civilizational and racial superiority. But that was a lie that took several centuries to build and reinforce, one that required forgetting huge, knowable swaths of history, both European and Indian. It remains open to interpretation how much your average British imperial bureaucrat knew he was lying in holding these views and how much he was simply the product of his times. I would trend towards saying that he generally knew it was a lie, because the evidence to the contrary was plentiful. However, human beings are remarkably capable of not knowing what they don't want to know, often to the extent that it is plausible to insist that they really believed what they claimed to believe, no matter how obviously false those ideas might have been.

Christopher Bayly's excellent Empire and Information would make a great first stop if you wanted to think through this problem: it is an analysis of what East India Company officials and then their British imperial successors "knew" about Indian societies and how they came to knew it. I think you would see in Bayly's analysis how the officials often struggled to contain the implications of what they knew (that the people they were ruling were not only sophisticated, complex human beings but were the products of rich, complex histories that included a massive body of philosophical, religious, scientific thought in multiple written languages) so that somehow at the end of the day they could go to sleep thinking that England was more 'civilized' while also almost certainly knowing that wasn't the case. Another great, short encounter with this contradiction would be George Orwell's famous essay "Shooting an Elephant", which is just generally a great read.