When I tried withdrawing money from my PayPal account, found a notice for automatic withdrawal option. The only question I had related to automatic withdrawal was about the withdrawal fees and found the answer in FAQ and I quote
Type of withdrawal PayPal fee Auto withdrawals made to your bank account in India None Withdrawals that you make to your bank account in India None
I enabled Automatic withdrawal option in my account.
Now when I tried withdrawing I still see the fees against my expectation of None.
As usual PayPal will take few months to get that implemented. So I did not complete the withdrawal to see how PayPal handles fees when automatically transferring funds to my bank account.