It is taught in schools too. At college level grad and PG and doctrorates are available. If you want to be an Indologist and examine the original texts, then this language is a must.
Which school teaches Sanskrit? Is there one in Mumbai? I know there are graduate courses. There are graduate courses in many foreign languages too. I took French.
Must be in Mumbai too. Of course, some schools offer French, German etc too. There is no law against teaching of any language. Even CBSE too offers exams in Sanskrit. Although Jain and Buddhist liturigy is in Pali, yet Sanskrit has been the prefered language of philosophy among them too.