RBI and Indian Government is hesitate for cryptocurrency because they think its a biggest security thread for India, money laundering and mafias can do illegal activity from this currency but Indian government can Legalize this currency making a new law and policies for investors who wanna invest in cryptocurrency i think this will make strong Indian economy.
Yes, I'm not too familiar with India, but I do remember hearing and reading lots about all of the 'black money' that exists as a result of corruption and such. And that the government was finally starting to take steps to improve that aspect of the economy. So I can understand why they might think crypto could derail their progress thus far.