Well there are many restrictions. You need to have PAN No. and a Bank a/c for withdrawal and account activation. You can receive upto 10000$ per transaction internationally but you can't receive any payment from an Indian Paypal a/c. Also You can't use the amount received to your paypal account for any kind of purchase, you would have to withdraw that money to your Bank a/c or Paypal would automatically send the money to your Bank a/c. For making payments or purchase you would need to attach your credit card in your Paypal account.
Account Activation process is simple and normally takes 3-4 days for verification and activation of account.