This is not really good news for India, I think people will refrain from investing in it for huge taxes. This could hinder the progress of cryptocurrency. Even then, a Member of Parliament from India has been thinking positively about it. He has already spoken about it in Parliament. "Government doesn't understand Crypto hence the strictly regulations": Priyanka Chaturvedi
This is going to impact only the Indian cryptocurrency market that, with all due respect, it's not very important. We survived the actual ban from China, not for bitcoin only but for mining as well, having or not having India won't change things, I just feel sorry for the Indian people.
In India there is more corruption and black money accumulation. The accumulated black money were much on the Switzerland banks as they don't reveal identity of the people. In specific most of the funds were of the politicians. Now the government fear that those accumulated black money might enter the country in the form of cryptocurrency. The government believe that high taxation will make people stop using bitcoin, but the hard reality is different.