If Indian government make rules for using crypto are a illegal business then crypto trade will illegal. But i think Indian peoples will use crypto because they invest large amount of money in this market. It is not possible for the government to control this market.

since there has not been any legitimate news from India regarding bitcoin and its regulation I am going to assume that it was all FUD, and that is mostly because people are still trading bitcoin enthusiastically and even more than before in India according to the high volumes. I believe the confusion you had may also be because of the things they said about the exchanges not the act of exchanging your coins.

Indian government is not against digital currency.  The decision taken by RBI is because of excessive outflow of Indian currency.  I think after sometime  and after some regulations crypto trading will again be allowed through banks. Also I have say that it is not illegal in India.

Though time is not fixed to announce bitcoin in India, I think they are planning to make it legal. India is a well techie country. So, I believe that making crypto legal in India is just a matter of time.

Trading on cryptocurrency of India after 7th July will not be illegal. Even though 7th july is made illegal in India, people of India will use it. Because most of the people of India have invested huge amounts in it. Which the government can never control.

It's not illegal for the consumer to use or buy/sell bitcoin at all.

All this means is that most commercial banks will essentially be forced to stopping co-operation with crypto exchanges that hold an account with them. That's pretty much it at this stage. There are unconfirmed rumors of the government wanting to implement a VAT on top of crypto trading, but that is obviously unconfirmed.

In fact, it's not even illegal based on my understand that banks continue to serve crypto businesses. It's just that they'll risk delicensing from the RBI, which is something that nobody wants.

Trading p2p should prove to be the go-to way to trade in India after this restriction is put in place. It's definitely not illegal for you to trade on localbitcoins still.

I doubt India will ban crptos completely because they will not be able to. The matter is still sub-judice and the final verdict is still awaited. But India doesn't have such kind of infrastructure to detect and ban all crypto exchanges. So most likely the existing businesses registered as a crypto business will be effected. The government doesn't have the power to detect the p2p transactions happening through fiat or through bank accounts in small volumes. So I doubt they will take any such legal step especially when the government has miserably failed to provide employment to the youth.

Just remember to keep your volume low. Don't exchange in significant volumes which doesn't match your previous banking history. If your average monthly holding value is 25k, don't exchange your bitcoins for 5 lac bank transfer. This will raise an alarm to the banks. Exchange within the limited amount and you are good to go. 

Its still not illegal to trade bitcoin in India and it will not be after 7th July. After 7th July users just won't get the support of banks to buy/sell cryptocurrency.

I wouldn't say illegal but rather prohibited on banks and institutions that the RBI and the government have official connections with. Besides, people can still go P2P if banks wouldn't be allowed to transact with exchanges after all so it's still good. The problem is, it will remove the convenience part on the people who wish to buy bitcoins and might discourage them on giving it a go, but persistent users would surely find a way and possibly create a better platform wherein they can trade their fiat to bitcoins without having to rely on bank transfers and third party, or in other words, a decentralized exchange. The future is still bright for Indians since no official bans were in place, so business as usual, just no bank transfers for bitcoins.

Its still not illegal to trade bitcoin in India and it will not be after 7th July. After 7th July users just won't get the support of banks to buy/sell cryptocurrency.
Trading is still being done in India right now. next hearing in september.