Cannabis is very much illegal and frowned upon. However, the leaf, "Bhang", is legal for religious purposes, and is mostly sold only in holy cities and during the hindu festival of colours, known as "holi". This is only one day a year.
Drug and alcohol abuse is low in the country, as India is very conservative. However, in communities that do happen to do drugs (such as the opium smoking custom in Rajisthan), nearly everyone has done it at some point. Cultural thing, really, like the Native American tobacco link. Mostly restricted to Rajisthan, however.