This will be a guaranteed failure. No citizen will want to use a mobile phone OS created in partnership with the government. Location tracking, call monitoring, access to financial accounts?! This is a data and privacy nightmare. Plus, none of the Android hardware manufacturers (Samsung, Nokia, Huawei, Oppo, etc) would ever allow this OS to replace the custom OS they have over Android. Android is already a tough operating system to deal with due multiple versions, hundreds of carriers with their spin on the OS, and all the hardware manufacturers.
The Indian government needs to lower its manufacturing/operating expectations and allow for foreign companies to invest and do business in country without manufacturing and taxation restrictions.