I have no idea of the prices of digital cameras in the indian market. However I can pen down a few things to watch for when going for a digital camera.
The resolution that you require - 1 million pixel, 2mp etc.
With a 2 mp resolution the max size of a good photo that you can print will be 4*6 inches.
Watch out for the battery type. Some cameras take only properitary battery. Some allow you to use rechargeable nicads or Lion. Battery costs are something you need to factor into for the running costs since digital cameras drain them very fast
Some good brands that you can lookout for are Olyumpus, Sony, Cannon and Nikon.
However keep in mind that like computers Digital cameras get obsolete in no time and have very little resale value. Having said that you can get some good second hand cameras at bargain rates.
In India , Konica charges Rs 12 for a 4by6 print which is nearly 3 times the normal charges. Keep that in mind.