Formally NO, just as it is illegal in many countries but we still do our thing,foreign markets still make transactions in India, the government even warned the banks to close the accounts of those who do transaction with cryptocurrency, but we had that there is a close door meeting were they are thinking on how to legalize cryptocurrency, i think we should be patient and see what will come out of it.
I guess it's not just happening in India but most in the other countries too though some of them banned bitcoin and some may say illegal but not yet legal due to some security purposes. If Indian country would release an update about of legalizing bitcoin in their country through the help of new regulations by putting a tax on it.