DGCA only disregards all flying hours before 5 years from the date of application for the process of conversion of CPL. Once you're issued the Indian CPL though, all your flying hours (even those before the preceeding 5 yrs) will count there on towards the ATPL and total time.
I went through the same situation. I had to clear my DGCA exams again and fly 200 hrs all over again. I had been to the DGCA to speak with the licensing officers personally to seek an exception to the rule as I had heard that they may consider on case to case basis but in vain. My only positive was to have my Indian RT with lifetime validity but had to do everything else like a new CPL aspirant.
Good luck.