Many countries have similar controls; they're often represented as being anti-money-laundering, and anti-terrorism, but they are also used to control capital outflows, and improve tax compliance. I have never seen any evidence that this sort of control actually works to prevent money laundering or terrorist financing, but it does seem to help governments reduce monetary outflows and audit for tax compliance (when they bother to actually read what they receive).

Given the impact of international terrorism and crime on India, minimising illicit money flow in and out of the country seems an inherently sensible precaution.

Indians are to blame for this. The indian goverment is dictatorial and has no expectations or respect of privacy or human rights