I really don't know how they legalize or i-legalize such thing as bitcoin because you are using it with your own internet and computer hardware maybe they just not supporting it before but every citizen of India can use it no matter what happens unless their government issue a criminal liabilities in using bitcoin.
I think if they legalized the bitcoin will become more popular in their country and I guess they will use it as real money where they can exchange it in many valuable things. Furthermore, I think it has positive effect on bitcoin industry, bitcoin community and in their country.