I am not sure if banning VPNs is part of DPDP Act or not (see edit2 below). I am talking about this directive from CERT-in (Ministry of Electronics and Information Technology (MeitY)) from 2022. To me this seems the likely reason, i.e. VPN companies who refuse to follow these ridiculous laws are being blocked right now.
Why are the VPNs required by law to keep data for 5 freaking years? Do you see the long list of things govt. want to keep log of? How does that help in maintaining privacy of Indian citizens? This is just utter madness; no upstanding citizen who cares about his privacy will stand for it.
Edit1: added more context
Edit2: DPDP Act draft seems like a step in right direction. I gave it a quick read, some of the language used is too broad, but I am not a legal guy. If you want to read it there is a link below. (It is both in Hindi and English). I don't think it has anything to do with VPN ban because it's only a draft (and not law or advisory) at this point and govt is asking for feedback/comments.