Check this out : http://www.2checkout.com/community/blog/2checkout-blog/important-notice-for-indian-suppliers and this page where they offer help for suffering paypal customers in India - "PayPal problems in India – Payoneer can help" http://www.2checkout.com/community/public/general/paypal-problems-in-india-payoneer-can-help/
Nice twist in the Paypal saga.. I guess it's a tug of war between the scammy paypal and bighead Indian government