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I have a car and have given the written test in California. So ideally I know that I can drive with one person with a permanent license with me. I wanted to ask whether my friend from India who has Indian permanent license can sit beside me and I can drive? He came to USA in 2012 with me, but he entered California just 20 days ago. I heard from some of my friends that he can sit along with me and I can drive.

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Assuming (as it sounds from your question) that you do not hold a valid driver license from your home country - your friend cannot sit beside you when you drive. The person sitting beside you must have a valid California license. See the information at the CA DMV:

You will then be issued a permit if you have never been licensed before. When you practice, you must have an accompanying adult who is 18 years of age or older, with a valid California license. This person must be close enough to you to take control of the vehicle if necessary. It is illegal for you to drive alone.

If you do have a valid driver license from your home country - CA recognizes it (if it is in English), however you must apply for a CA license within 10 days of becoming CA resident.

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