Mr India: The "real" Indian stuff
Lavapies is the barrio that every Madrileño goes to find a good Indian curry meal. The barrio probably has over 40 Indian restaurants to choose from, but -- truth is, only one of them is truly Indian -- the rest are all run by Bangladeshis. That doesn't mean they are bad, but it means that the food is not as authentic as it should be.
The only purely Indian restaurant in Lavapies, is Mr India. Located in the centre of Plaza Lavapies, the restaurant has a North Indian cook and is the official caterer for events at the Indian Embassy in Madrid. And, I have to say, the food here is more close to home than any other Indian place I have tried in the city. The Paneer Tikka, Chana Masala, Lamb Vindaloo, and Dal Tadka is what my standard order is, and it is just finger-licking good. They also have a selection of Indian beers to choose from.
The restaurant is not expensive, but compared to other "Indian" restaurants, it's a little more expensive (per person you are looking at an average of €10-15 per head, other places you can manage with €8-10) -- but if you are looking for good food from the subcontinent, this is the place to go.
Closest metro: Lavapies (yellow line) [walk out of the metro and it's the first restaurant on your right).