Is 'Updation' a correct word?

No, the -(t)ion derivational suffix can't be applied to update. Derivations are almost all irregular, and restricted in the words they can appear on.

Since update is a modern word, it follows the modern English trend of Zero-Derivation, like what Calvin calls "Verbing". Hence, as Shyam points out, the proper noun form of the verb update is also update.

Updation is incorrect. This word is mainly used in India instead of updating.

It's certainly not Standard English, but I have come across this word before, always in correspondence with IT engineers based in India.

I have a theory that it comes from SQL.

SQL (Structured Query Language) is a programming language widely used in business database systems. It has three main command words: INSERT, UPDATE and DELETE. insertion and deletion are commonly used nouns that describe the actions performed by the INSERT and DELETE commands, and business English users are very fond of words with Latin-sounding endings, so it would be natural for a non-native speaker to extend this group to include UPDATE.

In Standard English, the noun for describing the operation of the UPDATE command is simply update.

No. Update is the correct noun form. You could say,

I was involved in the update of the website.

OR

I was involved in updating the website.