You would not use the foreign paid tax credit in your case. Pension from India is taxable either in the US or in India, but not in both countries. This is based on the tax treaty between the US and India. You would have to claim the tax treaty exemption in the country where the pension would not be taxable.

https://www.irs.gov/pub/irs-trty/india.pdf

You would report the pension on form 4852, substitute for form 1099R.
If your pension is taxable in the US, you enter the full amount as taxable amount.
If your pension should be taxable only in India, you would then enter Zero as the taxable amount ad write "Us India tax treaty Article XX" as explanation.

Hello,

You should convert into USD using the following rate of 66.768 Rupee for 1 US $ (average for 2015). This is in the IRS table Yearly Average currency Exchange changes.

About the pension, it should be included in Other Taxable income (under Wages & income). If you have paid taxes in India, then you should also report them as passive income and deduct the taxes paid under Foreign Tax Credit section. 

You do not report taxes as passive income.