Standard dress for that area. Remember, the word "pajama" origionates from India. These guys are just dressing for comfort. Go to J C Penney's and grab a pair and discover for yourself that they are probably the most comfortable pants you can wear while sitting in a half lotus, playing any of the long lutes of India.
Jette, actually what they're wearing I think is a piece of fabric stitched together like a big loop. In Indonesia they call them a 'Sarong', I lived there as a kid and we wore them all the time, kind of like wrapping a very large towel around you, very comfortable though....
Oh wow, I'll never be able to listen to the Moody Blues the same way again!
The kurta/pyjama combo is traditional in that part of the world, thousands of years years old. And very comfortable. Does tend to look a little odd on a westerner though. Kind of like Mr. Spock in Star Trek IV. Uh oh, geek alarm went off!
In south India its called a Longi. Same thing as a sarong only smaller. Again super comfortable, and really flexible. I wear one when the climate reminds me of summer. If the longi looks big on pictures its moste likely a not so big Indian wearing it.
As everybody else is claiming, its really comfortable for playing sitar.
The thing they're wearing is called a lungi, everyone in india wears one and its great for indian sting instruments actually my teacher even wears one when he plays as long as he isn't preforming. I'm from north india and even there all my cousins and uncles wear it. (i live in canada now). Hope that gives some more info