All existing and new accounts in paypal should have PAN Number added to enable withdrawals. For existing users, this can be delayed a little when it prompts for PAN Number by navigating to My Accounts page. If you dont have a PAN Number then its time to register in order to continue your ebusiness with paypal. Last month (February) paypal blocked the transfers to and from indian accounts. And that is completely restored by this march 3rd. As a measure to prevent the account misuse and personal payment issues, paypal has now integrated this PAN Number verification to bring things under control.
This step from paypal also ensure the account safety than before.