That is false. It was rather yet another colonial endeavour:
"In 1940, the harmonium was banned from All-India Radio, theretofore the largest single employer of harmoniumists in India. John Foulds, a prolific composer and the European music director of All-India Radio, Delhi, was largely responsible for this ban. [...] In 1938 Foulds published an article called “The Harmonium” in which he suggested that it be banned because its tuning was incompatible with Indian classical music. Echoing a term coined by fellow theosophist Margaret Cousins, he called it the “Harm-Onium” in this article. But more significantly, he called it “un-Indian.” Shortly afterward, Lionel Fielden, the Controller of Broadcasting at the time, sent out a circular banning the use of the harmonium as an accompanying or solo instrument in Indian classical music broadcasts." (Matt Rahaim (2011). That Ban(e) of Indian Music: Hearing Politics in The Harmonium. The Journal of Asian Studies, 70, p. 673)