The Indian government is debating this topic for 2 months now. A country can only make the exchange of a bitcoin illegal. Because cryptocurrency can't be traced and is protected by blockchain, these transactions are secured.

What is meant by "banning a CURRENCY"?
It actually means that the government will not consider it as a legal tender for exchanges. But we can still exchange it where it is a viable option.

Effect of legalizing
If the Indian government makes bitcoin legal, there will be a huge impact on the value of bitcoin. It's a game of demand. When a certain phenomenon is acknowledged by the government, the trust for that phenomenon in the citizens increases. This increases in trust will lead to increase in demand and hence a shooting increase in value.

And why did I say "shooting" increase?
With the building of trust and increase in demand and hence value, people will start demanding it more. And hence a cycle of increase in demand and value will form. The only difference in each circle will be its size. Due to its large population and booming IT sector, more and more people will be getting involved. This can increase the value of bitcoin to new and unimaginable heights.