Hi hushar,
You state that they own a foreign trademark for your domain. An important question is whether or not they own trademark rights
in India (either registered or common law rights). If yes, then you might well face trademark infringement problems especially if you're using the domain in the same industry as the trademark owner. There's more general info
here.
Also, as chandan mentions above, it's important to know whether or not it's a generic word you're talking about. As a general rule, generic terms can't be trademarked - however there are exceptions such as when the
generic word acquires a secondary meaning.
I hope the above helps.