According to the latest update from PayPal [PP], users in India will be able to withdraw their money from their PP account to their bank account starting from 3rd of March, 2010.
However, you should know that Indian users may have to do some more verification in their account and it may also be required to show proof of the earnings source.
I am not in India and I do not have a PayPal account myself as it is not yet supported in my country, so I cannot write about other details: Check PP official blog for more details.
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Bob
It is possible in China, but the process is not easy either.