Costly Indian Books!

I just bought a few books in Delhi, and some of their prices made my eyes bug out. Amitav Ghosh's Sea of Poppies was Rs. 600 -- about $15! This is just 25% less than the $20 or so that you pay for typical hardcover books in the USA. Anita Jain's Marrying Anita was Rs. 500 -- in paperback!! Assuming a purchasing power parity of 5:1, that is the equivalent of an American mass market paperback costing about $100!

Surely books in India should be much cheaper for people to be able to buy and read them? Publishing costs in India should be much lower, and Indian publishing houses (including Penguin) seem to have very little publicity compared to Western publishing houses; this should drive down price even further. What is the reason for the high cost? I tried to think of some:

1. Low Volumes Sales might be much lower, so publishers have to increase margins. But then why not change things around and do things like release paperbacks right at the beginning, so people can buy them?
2. High Publishing Cost Maybe my assumption is wrong and publishing costs are almost as high in India as in the West.
3. Inefficiency? Maybe the publishing houses spend a lot on marketing but still don't realize enough sales increases?
4. Apathy It's also possible it's a "because we can" attitude; in other words, greed prevailing over good sense. But isn't that shooting themselves in the foot?
   

Or could it be some other reason?