It is not illegal to buy and sell bitcoins in India. There is no law in India which declares it illegal. In India, the cusp of a digital revolution is yet to recognize the cryptocurrency officially. The Reserve bank of India(RBI), which regulates Indian rupee, had earlier cautioned users, holders and traders of Virtual currencies including Bitcoins.
Any central bank or monetary authority do not authorize the creation, trading or usage of Bitcoins as a medium for payment. There are no regulatory approvals, registration or authorization is stated to have been obtained by the entities concerned for carrying on such activities. However, the central bank has not unequivocally banned Bitcoins in the country.