This ban is primarily to satiate anti-China sentiment. The global economy is too interwined with China. No country can afford to put a blanket ban on things that matter, without a viable plan-B.
De coupling with Chinese economy is good for India in the long run. This is the first step. India should engage more with democracies.
What democracies do you think are capable of meeting India's vast demand for consumer goods? Anything in the developed world is going to be prohibitively expensive. Anything outside is most likely a "democracy" just in name, or already within China's sphere of influence.
The trade alliance with China has been materially good to Indians. We've been able to afford more goods at cheaper rates. While we should try and move things back home, it's not going to happen overnight.
In the meantime, a population that was already struggling with income inequality, wage stagnation, unemployment and even growing poverty will see its material wealth slip further.