To me it appears as a highly unusual approach. I would be greatly surprised were it to catch on in India (or anywhere outside of the US for that matter) anytime soon.
For the benefit of other readers of this question let me recall that NSF came up with the idea is to send the grant proposal for review to the very grant applicants in the same field. NSF used a new scoring system that should prevent these reviewers from downgrading competitor’s proposals to improve the odds of acceptance for their own grant application; the reviewers were awarded bonus points on their own grant applications "if their assessments of other proposals closely matched what their colleagues thought." (The quote is from the linked paper.)