Hello Ashok,
I am surprised, I live in Bangalore and I have been using Atmel 89C51, 89C52, and now 89S52 without any problems at all, and the prices have been steadily comming down, the 89S52 is around Rs.52/= here.

I am also using the P89C51RD2HBA and now the P89C51RD2BN again without any problems, again the prices have come down substantially, it it now available for Rs.150/= (Elektronika Sales - Chennai).
A couple of years ago it cost Rs.350/=
The P89C668 is also available with them, they do support small quantities, at least a minimum of 5Nos. at a time should be reasonable.
They also have the new LPC900 series, I recently purchased 8 pin and 14 pin versions again in small quantities.

For your development, I suggest a P89C51RD2BN (Rs.150/=) and Flash Magic, right now I am using the same combination and writing code for a product, erasing and downloading code tens of time per day without any problems.When you port the code to smaller micros you will have make necessary changes.

Regards,
John.