Energy production is unfortunately somewhat political in nature, as opposed to energy usage which is more objective.

Compressing the air may be inefficient, but if the compressed air is provided from a waste or excess capacity source, it is economical. Consider, for example, large 10,000 to 50,000 liter underground air tanks used for heavy industry. Tanks must be filled uniformly to a set pressure to power equipment, which means that excess capacity is written off, especially if the tanks are dessicated on a weekly or monthly basis.

Using the excess capacity would be pushing the balance sheets towards the black. This is sort of like a production/six sigma problem - reducing waste may make even 12% efficient devices cost effective, if the initial efficiency is 0%.

I don't think the indians are attempting to replace normal cars with this. It is and probably will be a niche market for those people who have excess compressed air capability.

That said, it's still interesting!