I downloaded the package and couldn't find any licence file.But according to me It seems to have some proprietory licencing because first line at http://www.m17n.org/emacs-indian/ says that Project Team has received permission from C-DAC to use the font.
The absence of a license means that these fonts are non-free. "Permission from C-DAC to use the font" does not alter that, so it does not make the situation any better.
It is a bad thing that m17n.org is distributing non-free fonts from C-DAC.
Can someone tell me the name and email address of the people who run that site? We should write to them to ask them to stop distributing these fonts, but first we should think carefully about what to say to them.
I have cc'd Kenichi Handa because he is closely involved in Emacs internationalization, and because he has some connection (I don't know what) with that site.