I'm not even sure if there is another place for decent Indian food, but once we found Shalimar, we stopped looking. I ate here twice over 3-weeks and was really impressed with my meal each time. In-fact, this was my choice of restaurant for my last night on the island. We always ordered enough food to share, and as we always ate here in a big group, tried most menu items. I don't recall there being anything I wouldn't order again. Most of us felt it was suitably authentic, but most of our palates were a bit confused, and we were just happy to try 'different' spicy food.
The restaurant itself is beautiful, but you may not notice it from the street as it is walled in (unlike most restaurants on Koh Tao which are open to the street or each). Like almost all restaurants and bars, it is open air. Usually if I suggested Shalimar, someone would ask "the place with the tree inside it?" - the tree is definitely a noticeable landmark/feature.
One of the reasons we went there on my last night was to celebrate my moving on with sheesha, but for some reason it wasn't available. This wasn't explained to us but I noticed the page was no longer on their menu. For some reason between the 2nd week of August and the 4th week of August it had been removed from their menu. Smoking is still OK (as it is almost everywhere on KT), so I didn't get the impression it was part of a move to a smokeless environment, but our waiter wouldn't explain what had happened or why it wasn't available.
This review is the subjective opinion of a TripAdvisor member and not of TripAdvisor LLC.