As per the latest email which i had received from PayPal, states that they are going to update the policy for Indian users. Basically the new policy states that PayPal from now onwards will consider 4.0% as the currency conversion fee instead of 2.5%. This policy is applicable not only to India but to many other countries also. You should also take it account the fact that PayPal does not accept the actual exchange rate which is prevailing instead it has it’s own exchange rate.
This means i will get less money when my PayPal balance is converted to Indian currency after this update.
Credits to Rajiv Gupta of EternalQuestions for this piece of info.