I agree with your observation of India but note that biodegradable packaging has to be looked after or else it degrades before you’re ready. Think of flour packaged in paper: it is in fact sold that way in some places but it leaks and if it gets wet the flour is ruined.
This is a product designed for somewhat demanding conditions.
If anything your good argument really asks why a more biodegradable approach is not used in places that could afford it (I don’t mean economically but in “having the affordances for”). Western countries can manage to reliably package and use flour in biodegradable paper packages, why not other products? And the plastic bags that are a scourge upon the landscape not just of India are formthe most part not really needed.