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.
...Besides that, if the trader uses a mixer then it will be really tough for governments to track the source.
It's about transactions where user converts crypto to inr, no government has means to track down every crypto or every transaction.