Which upgrades are required for participate in cycle race? I want to take part in cycle race, so for that I upgrade my bicycle to 18 gear. (It was not shipped with gears)
Here is my cycle STREET RACER NE 26T. (this is the same model I've, but size may be different)

Is it good idea to use upgraded cycle in race or I should buy new one on which gears are pre installed?

Here is my event detail 
Vishal Khadi BRM - 200 and here 200 BRM on 16-Jul-2017

Also is this type of bicycle is ok for this type of race event or I need other one?

Here are some personal detail
I am riding around 20km (in 1 hour) in working days.
40-45 km in weekends and it take aprox 1 to 1.5 hour.
Max speed I rode was 42km / hour (in trafic)

This is first time I am taking part in cycle race event, so how should I start practice for this event?
You can ride any bike in a race, provided it's in good enough working order to get you over the line.

Regarding gears, it looks like the cost to add derailleur style gears may be prohibitive, as I assume this bike's rear wheel is single-speed specific and the dropouts aren't vertical (which isn't the end of the world but not ideal). I'd probably either look at a geared road bike, or rebuild your rear wheel around an Alfine/Nexus internally geared hub. 

If this is your first race I'd probably just ride what you have to see if you like riding competitively before spending money on upgrades or on a new bike.

edit: This 'race' appears to be a 200km audax - I'd be incredibly reluctant to do that kind of distance as your first race. Have you ridden over 150km in one hit? If you're super fit, or not bothered about your time you could do it on your existing bike, but a specific road/audax bike would do it quicker and more comfortably. Maybe build up slowly to that kind of distance - that's a very long day in the saddle.