This is a good decision. Huawei is showing lots of confidence in letting governments around the world reviewing its source code. If the Indian government can't find any real evidence, then it will run out of these patriotic steam to stop Huawei.
Realistically I don't think India can exclude Huawei, a company that offers superior products at lower price. On top of that, India has no indigenous telecommunication equipment company in the competition, so by denying Huawei, it has to turn to other western companies for more expensive options. Lastly, Huawei is a major invesstor in India employing tons of people. Shutting Huawei out means many Indians will lose their jobs.