A number of my favorites are either unavailable outside of India like or are inaccessible unless you already know a fair amount about the country and its history, like Shashi Tharoor's The Great Indian Novel, which is hilarious and brilliant if you're very familiar with both The Mahabharata and the Indian Independence movement and incomprehensible if you're not. Hence the odd assortment of recommendations.

City of Djinns
by William Dalrymple
A British journalist moves to New Delhi and unpeels the layers of the city's history even as he struggles to get a telephone installed and otherwise deal with daily life. Accessible, funny, and brilliantly structured.

I also recommend Dalrymple's set of essays on India, The Age of Kali.

A Taste of India
by Madhur Jaffrey
Out of print. Try the library, used bookshops, or abebooks.com.

This is technically a cookbook, but it's also a beautifully written (and beautifully illustrated) book about the regions of India and their varied cultures, people, and cuisines. It makes me nostalgic - and hungry.

Love, Stars, and all That
by Kirin Narayan
A charming novel about a slightly overage Indian virgin in a California grad school. Her auntie predicted that she'd meet the love of her life in March 1984 -so where is he? If there was any justice in the world, this novel would have gotten the sales that Bridget Jones' Diary sucked up.

Salaam Bombay!
by Mira Nair
Yes, this is a movie: a brilliant docudrama about street kids in Bombay. As compelling as a thriller and utterly heartbreaking, but not without hope.