Cryptocurrencies are not illegal, but their use in ponzi and other illegal stuff is definitely banned.
You can see the similar case that Rupee is not banned but people doing illegal stuff with it is banned.
Till the time committee report which is being awaited for in the country does not comes out it is legal in India. Yes government has cautious people to stay away from it in anticipation that if btc value goes down people will lose their money. So we will hope that committee report is on positive note and legally county can accept it.