Exchange is trying to find a way to solve this problem. All this means that most commercial banks will essentially be forced to stop cooperating with the encrypted exchange that contains an account with them. There are unconfirmed rumors of government wanting to make a VAT on top of a cryptographic transaction, but that's obviously not confirmed yet. It's just that they are at risk of delicensing from the RBI, which is something that no one wants. It certainly is not illegal for you to transact on localbitcoins still.