Has to be a local option?
Yes. When my Canon S2 IS died within 2 years, I couldn't do much here in India because Canon have a regional warranty system and they wouldn't consider my camera (brought in US) for free repair even though Canon gives a 2 year warranty in India. The repair charges asked by the Canon authorised service center were exorbitant (almost Rs. 10,000) and I decided to get myself a new camera instead. I'd be glad to go the non-Canon route if there are better options available in other brands because I feel cheated by Canon(actually, there's more to this story which I'm skipping out here). I don't know if other brands too have the regional waranty system but I'd just like to buy the camera here (even though its expensive compared to US) and have the peace of mind.
I was thinking of limiting myself to a budget of Rs 15,000 but am willing to extend that a bit. The Panasonic TZ4 (known as TZ11 here) costs Rs 16,000 here. This website is regularly updated with the latest prices: http://www.jjmehta.com/pricelist/propricelist1.html
. They removed the A720 IS and SX100 IS from their list yesterday but I'm sure they're still available here.