Definitely if they find.. But it is .in extension.. Not so popular one.. So mostly u won't get any problem right now, unless it gets popular..
I was thinking of using it for a proxy, but if all have legal problems all just forward the domain to go to youtube.com
I was browsing thew the domain sale form and someone is selling this domain myspace.net.in would this be the same in my case? since it is a india domain?
The person is giving bad information to sell a domain. It's trademark infringement and while getting an award against the owner may be more difficult, taking the domain wouldn't. I also read that India's Union Cabinet approved India's accession to the Madrid Protocol - which means they would agree to recognize international trademarks - and youtube (and similar) is certainly a protected trademark. You can't register a similar domain name to ride the goodwill established by someone else.