Currently the easiest way for Indian Paypal users to do online transactions is by adding a debit card or credit card to the Paypal account. According to RBI regulations, Indian Paypal users can't spend their Paypal balance directly. Most Indian ATM/Debit cards cannot be used with Paypal, for example SBI VISA Yuva International Debit/ATM card and SBI Maestro ATM/Debit card. These cards have the phrase "For Electronic Use Only" written at the top.
However, if you have an HDFC bank account, or can create one, you can simply apply for a HDFC Netsafe VCC (Virtual Credit Card) for each transaction, like paying for you webhosting or domain name. Each HDFC Netsafe VCC is valid for 48 hours, and upto 5 can be created in 24 hours.
All details about creating and using HDFC Debit/ATM card associated Netsafe VCC have been given on the HDFC website: HOW TO CREATE AND USE HDFC DEBIT CARD NETSAFE VCC
The best part of this process is that you need not divulge the actual Debit Card number or PIN to Paypal.
If you have a credit card, you need not even create a VCC.
