Google today launched free SMS service on Gmail in India, using this service, users can send free SMS from Gmail chat to Mobile phones.Responses to those text messages will appear as regular chat replies and conversations will also be stored in your Chat history. Although there is no official word from Google on the launch of this service, but the new feature already rolled out for Indian Gmail users on October 10 and is now accessible to Indian users along with 51 other countries Asia, Africa and North America. Except Airtel,the Gmail Free SMS service is now available on eight Indian Mobile operators :Aircel, Idea, Loop Mobile, MTS, Reliance, Tata DoCoMo, Tata indicom and Vodafone. Update: The free sms service works on all Indian Mobile operators including Airtel, however I noticed a reply text message will cost RS 1.50 from Airtel,
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How to Send Free SMS using Gmail ?
First, if the service is not enabled on your Gmail, click “Settings” (wheel icon), then click on “labs”, enable SMS in chat feature and save changes. 
To send a message, just type a phone number into the search box at the top of the chat window on the left side of the Gmail interface, and hit ‘Send SMS’. Numbers can be associated with contact names so you don’t have to keep manually entering them. Recipients of these messages can respond by simply hitting ‘reply’ on their cell phones to send their own SMS message (Gmail ties a unique phone number with each of your contacts). Every user starts with a free 50 SMS credit, usually of 50 messages and every sent SMS costs one credit, user will receive 5 credits for ever reply of the text message(maximum level 50 SMS credit). If no replies are received to any of the sent 50 text messages and the credit balance come down to zero, but Google will add one credit after 24 hours.This credit limit was intended for preventing misuse of this service or spamming. Users can always send an SMS to their own phone, and then reply to that message multiple times. Every time they send a reply message, thier SMS credit is increased by five. Effectively, users will be buying more messages by paying their phone company for these outgoing messages
How to block/unblock Gmail Free SMS ?
If users doesn’t want to receive SMSs sent from Gmail Chat, they can block it by replying to the message with the word ‘BLOCK’ and later if they wish to continue receiving messages they can reply to the message with ‘UNBLOCK’. Gmail Indian users can totally block this service, if they do not wish text messages from any Gmail user, just by sending ‘STOP’ SMS to +918082801060 and to reactivate the service they can SMS ‘START’ to the same number.