You are absolutely right that the government in India never makes things clear so as to be able to operate without confusion. Crypto being a new world, I wonder if the non-tech savvy ministers even understand what it is and the potential it has in the world.
As you said, if it was illegal, the exchanges wouldn't have been able to run and now since they are asking for taxes from these high profile traders, we can say that cryptocurrencies are technically legal. Because how can they charge tax from illegal activities?