You could get an unlocked iPhone in the grey market of India like the Sarojini Nagar and Palika Bazar in New Delhi, Heera Panna in Mumbai for around Rs 30,000. A cheaper way is to get an iPhone from Apple directly and then unlock it for yourself or have an expert do it for you. Alternatively, some online sites are also selling unlocked iPhone in India. Steve Jobs recently confirmed that iPhone will become available in India in 2008 LEGALLY.
There are several softwares available to unlock the first version of iPhone (not iPhone 3G). When I started reading about those on the internet, it was really difficult to decide which technique to use. There are all sorts of websites dedicated for iPhone unlocking, but I decided to stick with the big names only. Although for most people who have unlocked iPhone have almost no trouble, but there is always a fear that Apple may come with a future update to overcome the hack especially if you try to to upgrade the firmware using the standard iTunes route. Few believe that since Apple has anyway come with next generation iPhone 3G, so they would rather care less about the previous version anyway, also annoying people who have spent all the time & money to get the unlocked iPhone may get angry and switch to competing smart phones like BlackBerry, HTC Touch or Motorola-Q. :)
