I've not heard this particular structure used with ethnicity or nationality. It's more common in a phrase like:
I take him for what he is.
with "take" meaning "I accept him", or "I believe him to be", and "for" meaning something more like "as". To rephrase:
I accept him as what he actually is, and I don't expect him to be more or less than what he is.
For example, suppose you have a brother who is generous and kind, and is always quick to help out a friend, but who can never seem to keep a job for very long. You can say that you "take him as he is" -- that you know him to be a good person, but probably someone who will always be in need of financial help.
On its surface, "I know him for an Indian" suggests that you are aware he is Indian (by culture or nationality or both). But it also can imply that he is no more and no less than Indian, which can sound derogatory.
Naturally, this depends on context. This might be a formal way to to suggest common heritage, for example:
I know you for an Indian, sir, and so you will understand how my family obligations perpetually weigh on my mind.
We would need more context to say for sure what it means in your example. But keep in mind that this structure is somewhat formal, possibly even archaic, so be careful using it yourself until you understand the nuance.