Update: Added new screenshots of Google Ads in multiple languages.
Alootechie has captured a screenshot of a Google Adwords campaign running in Hindi (the national language of India)
While Google Adsense allows regional language ads like Hindi or Urdu, the interesting part here is that the Hindi ad is running alongside an English Language Ad inside the same Adsense unit.
So by giving more language choices to the site visitor, it may help improve the chances of a click.
Google uses the site user's IP address to determine the user's location and show the ad. When they can't determine the user's location, they'll show country- and territory-targeted ads.
In this case, I am sure the Ad above is targetted only for users residing in the states of North India.