You don't do anything. PayPal itself will convert the currency and deposits in your bank account. After converting, the amount you'll see is the amount you'll get deposited.
In case you mean “how to change the currency that you hold to another currency like Australian dollar” , the you can't convert like that into INR. Because you can't store the amount in PayPal India. So either you've to spend or receive. Received funds will automatically withdrawn as I said above.
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