How can I Convert a SQL database design to a drupal schema installation file?

Take a look at   d7 hook_schema 

 

you will write your code at Your_Module_Name.install file.

Take a look at Schema module.
https://drupal.org/project/schema The Schema API allows modules to declare their database tables in a structured array and provides API functions for creating, dropping, and changing tables, columns, keys, and indexes.