I am in the same boat. Have been looking for a good but cheap dock. I haven't done an A/B comparison (and it seems unlikely) but the cheapest one -- Apple's own Universal dock for around 3,000 -- seems to be a good bet.
I saw a Bonyq Ipod dock in reliance ilife the other day, sounded pretty good, i was quoted about 9.4k for that. it came with all the connectors to connect the whole ipod family from 1st generation. it also included a line-in to connect via a normal 3.5 mm cable.
reliance ilife is a good place to buy quality ipod accessories
check out ILuv I199. I believe its available in india, havent heard this one, but the features are good. ipod, cd, usb pendrive etc. alarm clock etc.
If you do manage to hear it out, please do let me know how it sounds. I haventheard it yet.