Apparently about 2 dozen odd expat pilots at AIE have failed their medical in India.
Indian medical standards are very different from FAA/JAA. Failing an Indian medical does mean that your wings will be clipped here in India. But as long as you meet the standards of the examining authority you will be fine in that country.
As far as fitness, having flown in India previously, I know that there are many chain smoking, heavy drinking, overweight pilots here who perhaps are a higher risk and live an unhealthy lifestyle. But, they know how to work the system. 30 days prior to their scheduled medical, they go on a strict diet, ayurvedic medicine, yoga etc plus local products to bring blood pressure and sugar down. They pass the medical and then off to their normal routine again.
Now, it's not everyone who does it, but it does happen here. It probably happens elsewhere as well but not as drastic because the FAA is far more pilot friendly than the DGCA when it comes to a medical. There are many ATP holders in the U.S flying for years with "one eye", prosthetic leg, cancer survivors etc.