Regulating the Indian economy is like squeezing a water balloon - whichever direction you squeeze from, you only make some other part fatter. If this ban went into effect, average people might comply and divest from crypto, but wealthy opportunists will always find a way to subvert government regulation through bribery and political connections.
Look at demonetization - people with large amounts of illicit funds would bribe bank managers to create thousands of new accounts in their name, to overcome the reporting/exchange limits. The aam aadmi (Hindi for common man) ended up with the short end of the stick, as the cash supply dwindled and people had to spend hours waiting at the ATM.