Contrary to common belief, I believe that Indian Government and RBI is very proactive to Bitcoins and Blockchains. The major roadblock for them is widespread illiteracy and misinformation regarding Bitcoins.
People are still prone to Netbanking and Credit Card frauds. Giving something as powerful such as Bitcoins in their hands will be inviting devil in your house. People are still afraid to use their debit cards, paytm and the reason is what if something goes wrong. Secondly the concept of transaction charges is new to them.
Still government is pushing for fast digital reforms. They are focusing more on digital payments and less on Cash.
Also Bitcoin is being introduced to people as quick rich schemes in form of Ponzis, MLMs and fake coins. Government cannot find and stop all these illegal activities themselves. Their only option is to discourage people from investing in it. Do notice they have not declared it illegal, they have just advised people to be cautioned while investing in it as Bitcoin prices are unstable and volatile. If you think RBI and Govt. of India lacks vision, for the same reason Warren Buffet and Mark Cuban are not yet in favour of Bitcoins.
On the other hand, RBI has already published paper on Applications of Bitcoins.
Here is a link to the same ==> http://www.idrbt.ac.in/assets/pu...
Government, RBI and ASSOCHAM are conducting workshops across the industry to discuss about Bitcoins and how they can be used in efficient governance.
They have also started asking people for their opinions about the Blockchains on
Comments/Suggestions Invited for the Existing Virtual Currencies Framework
Yes, India is still cautioned over Bitcoins as an investment tool. But we are very much aware of the power of the underlying technology. Many banks are working on the blockchain technology itself and undergoing beta tests with their applications.
The future is bright and shinning. Many companies will start using Bitcoin technology for ease of business and governance. As an investment tool and currency, Bitcoin still has a long way to go. Till it becomes stable and people are comfortable with digital payments, Bitcoins will live in legal/illegal area (the grey area).