Cannot answer for everyone in India, of course, even broadly, because I have never checked this out before. But for home use, based on my own approach and that of relatives and friends, I can say: just in a place in the kitchen away from direct sunlight, and in a slightly cooler place, if possible. Open, not covered, so air can circulate. Also, my guess is that many households buy only a small amount at a time, and use it up before it has a chance to go bad. For restaurants and other bigger users, don't know how they do it. Interesting point, I will see if I can find out.
In homes, they do spoil, sometimes, if you don't use them soon.
This made me think of another point: I wonder if there is any home-based small-scale way of preserving potatoes for a long period? You can do that in multiple ways for many vegetables (fermenting, pickling, drying, etc.).
>And what kind of potatoes do you produce?
If you mean varieties, like I've read about in the US, such as Yukon Gold, russet potatoes, etc., I don't know the answer, sorry. My guess is that most of us here may not be aware of potato varieties, or there could be only one or a few mainstream ones, possibly due to India's green revolution having the side-effect of knocking out many earlier-existing varieties. But that may be more true of natively Indian plant species, not so much for the potato, which only came to India, I guess, a few hundred years ago, via the Portuguese, probably.