Yes you can. The merchants will be able to buy and sell bitcoins using the platform if they want to or they can use the card to process sale of goods/services. The whole idea is to make Bitcoins available locally so that you can transact faster than if using an exchange. Just take cash and buy Bitcoins and this will provide a more secure way to transact as the merchant will have to adhere to KYC norms and for India, even the cardholder needs to.

The Bitcoin exchanges will also play a major role as they will be dealing with all the merchant demands i.e. buy or sell bitcoins whereas the merchants can deal with the card holder demands.