Shoots wide of the goal
"India's government claims these untraceable phones are a potential security threat when in the hands of unsavory individuals." As are hammers, knives, wire cutters, bent law enforcement officers, computers, greedy bankers and politicians and so, so many other things.
This change will allow calls to no longer be anonymous, to be traced to a phone and associated with other calls, it does nothing to identify the owner of the phone. I imagine people buy these phones because they are cheap, so they move to a cheap pay as you go system (presuming such exists in India). Those that buy these phones for "unsavoury" purposes will find an alternative, hack the IMEI (is this even possible?) or just buy pay as you go for cash and still remain anonymous. Even though the phone itself can be associated with calls and the shop it was purchased from, it still cannot be associated with a person or valid name and address. So those that can only afford this kind of cheap Chinese import will suffer, whilst any "unsavoury" character will use a more expensive alternative.
Seems that this is another situation where the innocent pay the price whilst the criminals/terrorists just change M.O. It's a familiar scenario, has the Indian government been taking tips from the UK government?