> Buying BTC using INR is as hard as buying USD using INR since you need to show the paper trail.

What do you mean? To whom are you showing a paper trail? Do you have to account for cash withdrawals from a bank?

Do you have to show a paper trail if you take out some money from the bank, and use it to buy a motorcycle, or twenty barrels of grain, or ten iPhones?

As a business, yes. As an individual, yes if you are audited. Also those examples are relatively small amounts.