I think the Indian government can do alot about that.
No they can't. At most what they can do is move the semi finals and finals if Pakistan makes it to outside of India, but they absolutely have no power in taking Pak's semi final status away from them if they make it to that place.
Who engineered this complete nonsense?
Indian Govern and their puppet BCCI told the teams to not buy any Pakis. That's what I get off it.