Here's a weird data point:

I recently got a new phone from the US. As soon as it realized it was in India, "add a payment card" disappeared from Google Wallet. Trying to add cards from within bank apps didn't work either, except for a German card that did add--but the whole interface is hidden so I can't do anything with it. It does work to pay for things, though: when I tap my unlocked phone to a contactless reader, the standard Google Wallet screen with the card image pops up and the card goes through.

Apple Pay continues to work fine in India with cards from any country where it's supported, and you can still add new cards while in India. I guess Apple isn't running India's second largest UPI app so they're not under the microscope.

The particularly ironic part is that my Google account is "American" so I can't even download the Indian GPay (UPI) app.

edit: I'm now sitting in Europe with a local SIM and after a couple hours, the payment card functionality reappeared so now I can change my default card. Still can't add my Capital One card so that's probably a them problem.