Perhaps for the same reason as all other countries. Everyone is afraid of the consequences, they are afraid to take the first step, because they do not know what it will lead to, although they understand that cryptocurrency is not the future, but the technology of today. South Korea shows an example of introducing taxation and regulation of the crypto currency market and I am sure that further countries will follow Korea and will begin to make changes in their legislation and adopt cryptocurrency.

Major reasons for fear of crypto or ban on crypto transactions in any country may :
1  Developing nations need surplus stocks of foreign currency.  These countries fear with the legalization and permission of trading in crypto ; there may be uncontrolled outflow of currency resulting in very tight foreign currency resources available.  
2.  Terror funding ; black marketing; money laundering becomes easy.  Many nations like India are suffering from the threat of islamic terrorists.  If their funding increases the attacks will increase.
3  Many citizens of a country having black money will easily divert their funds to safe heavens like Switzerland.

So India like many other nations is having fear for it.  Though Indian government wants the currency to be digitalized .  May be they are doing any research work for allowing crypto transactions legal because they also know it's benefits.

The reason the Indian government forbids Bitcoin, Bitcoin is a Ponzi scheme that can deceive all the people of India. therefore the Reserve Bank of India (RBI) has unilaterally refused to legalize Bitcoin without authorization from the Indian government.

After the RBI submitted its request not to legalize bitcoin and considered Bitcoin a Ponzi scheme, many others who criticized RBI even cointelegrap loudly criticize for describing Bitcoin being a Ponzi scheme.

but you do not worry, on 20 June the government of India has legalized Bitcoin and refused the RBI request, because the application and decision unilateral of RBI does not make sense and there is no strong law.

 May be the Indian government did not trust bitcoin and other altcoins and they think that they need to protect their people from any investment that possibly may risk the money of their people.

so basically the government that cannot control the wealth of citizens bans it.
There needs to be a big power shift in this world imo

from news that I read that the crypto ban in India has been challenged by the Internet and Mobile Association of India (IAMAI), and the trial will take place on July 20, we are waiting for the RBI decision to be considered in court

The Indian government's decision has several reasons
Withdraw money, especially hard currency from banks and exit abroad
Money laundering operations related to drug money
and corruption and funding of Hindu terrorism against Muslim
 minorities and some radical groups belonging to Islam

I also do not think that they have still taken such a step. May be they are thinking about it but nothing is so much clear about it, i think that even if they will do so i am sure that very soon they will change their decision, because almost all the countries of the world are going to legalize bitcoin. Because it is becoming the common currency of the world.

I think only RBI or the banks only banned crypto currency, not India as a whole. I think they are taking crypto as a threat as they barely control it. Besides, they think that crypto can replace fiat currency very soon which is actually not possible to happen.