Actually, they can track the payments if they decided to. All they need to do is ask the exchanges to collect PAN details of the customers and the list of trades. If India is going to regulate Crypto transactions, exchanges will welcome the decision considering the current scenario.
The governments will only be able to track the trades and the deposits/withdrawals made on the exchange itself.
That's the limit which they cannot exceed. The governments will not be able to track the source of the deposits/withdraws and trades that are done outside of the exchange and even if they do try to track the trades then all they will get is a long chain of transactions. Besides that, if the trader uses a mixer then it will be really tough for governments to track the source.