If they open a INR, PayPal will instruct you to resend the item. (at your expense) Their reasoning was that you have the money and the item and they don't cover post or something (eyes glazed over at this bit cos I was furious at their decision and wasn't heqaring what I expected)

For that reason, I would try not to let this go as far as a PayPal dispute.

I reckon, message the seller (so eBay sees you have tried) and tell them that the parcel has been returned, and let them know that you will look forward to repostiong the item to them once they forward you additional postage.

I'd also give eBay a ring to make sure it is at least a note on your account - arm yourself with everything possible to fight a potential neg is my thoughts.

Wait and see if they ask for a refund, I wouldn't be offering it, just leave it as the expectation that you are either awaiting collection or money to post the thing.