An exit plan in itself is not necessarily bad as long as it's not a hasty one.
It also keeps the politicians and their constituents happy election time!
Most countries (USA in particular) has similar restrictions on hiring of foreign applicants (non-immigrants). They have to submit documentation proving that there are no U.S. applicants capable of the job before a work visa can be granted. Not much in India is black and white, just plenty of shades of grey!
Expats Capts really do not have much to worry about. The worst case scenario is that they will be asked to depart in 3-5 years. I think very few want to be here for more than that time anyway. By that time all the age 60 guys will have reached 65. And if India does not want expats, then China, ME, Korea, Vietnam and others will be more than glad to take them as quickly as they can, with improved terms and conditions. If the EU relaxes its work rules for U.S pilots then that will open up a whole new job market.
Ask any expat Capt who is registered with a contract agency. They will tell you that offers are plenty and keep coming weekly if you have time in type and PIC on the favoured aircraft in use.