It's not a cultural thing but, gambling has a remarkable influence in the history of India. It is obvious that Indian people really likes to gamble and crypto just fueled the interest by offering anonymous bets. If government is going to regulate and make it legal. It would be good for the country as they can't do much against the underground gambling.
Gambling would surely boost their economy and there's no solution for those underground gambling that exists in India. Its not them who only tackles with this problematic situation but many countries do so.
They are legalizing it and if you'll search for different Indian-based online casino's, there's too many of it that exists today including the non-crypto and crypto casino's.
It is good for the Indian government. They can collect huge taxes on crypto transactions. When they allow gambling people would gamble freely as they already gambling without regulation of the government, they would better help their economy by collecting money from all over the world. Other countries should also legalize gambling because it cannot be stopped.