I am following closely the situation that PayPal users in India are facing right now since the suspension of its services to receive or send personal payments from an Indian registered PayPal account. Withdrawal to a local bank which was scheduled for this week has also failed to materialize.
Meanwhile, Farhad Irani, head of PayPal’s Asia Pacific, mentioned in a blog post that Indian users can still withdraw PayPal funds already sitting in their PayPal account by requesting for a paper cheque and the usual service fee of US$5 has been waived for the time being.
PayPal users can also withdraw their PayPal funds to their credit card and although this is not mentioned, I believe this service fee is waived as well.
However, this still doesn’t address the issue of Indian PayPal users’ inability to receive funds through PayPal. I understand that there are many Indian users using this service legitimately to sell online services from writing to web designing and PayPal has been the most convenient international payment mode thus far.