Confused with all the talk on "International Roaming"

I am going to India , I want to use the iphone as an Internet device only like "Touch" ( that too Not over EDGE). I don't want to make Calls , i don't want to check my voice mail .I don't want to receive any calls
All I want is to use it as a Internet device that too on WIFI ( basically my Home WIFI)
I will have a local phone and VOIP Phone for everything else.
Is my Only Option Removing the SIM ?

You are absolutely correct.
Turning Data Roaming off turns off all DATA access while roaming. It is off by default.
BUT -- it does not change your phone service, which will still connect to a new network when you are internationally roaming. It also includes text messaging (which runs on the phone access, not data access network) and and voice mail.
In short:
If you want your phone, but no data access unless it is WiFi turn Data Roaming Off in your network settings. You will get phone, text, and voicemail, charged at international rates unless you have a discounted international plan,
If you want neither your phone or your data access while roaming but still want wifi, the only choice you have is to take out your SIM card.
If you do not want phone, data, or wifi, then turn on Airport Mode, which disables all of them (Note that you will have to put it back in airport mode every time you reset your iPhone)
You do, however, have all those add-per-month options you can put on to greatly discount minimal use of data while roaming -- see the international page for those things. You can cancel them after you return from the trip. Basic one-month charges will apply wether or not you use up all your data allotments.
One more note: if you have no international roaming provisioned on your account, you will not have to worry about any international network nor data connection. You can check that from ATT. For new users, that is turned off by default until you have been an ATT user for at least 3 billing cycles, and request it to be added. It requires an additional credit check through ATT International Provisioning before it is even activated on your account.
Not knowing what situation the OP is in, there are several options as outlined above.

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