A good barometer for judging what India's English- speaking elite is reading in a country where there are no best-seller lists, and where no one is even sure how many books are published, is to go to New Delhi's Khan market and ask Balraj Bahri, the proprietor of the Bahri Sons bookshop, what the neighborhood's cabinet ministers and diplomatic wives are snapping up.

"Mark Tully's book," he says these days, meaning Amritsar: Mrs. Gandhi's Last Battle, by Mark Tully and Satish Jacob, the BBC correspondents who covered the late prime minister Indira Gandhi's raid on Amritsar's Golden Temple of the Sikhs. The book is the talk of this capital's ruling circles, who are praising it as an important, even-handed and readable account of one of the most divisive crises in modern Indian history. Tully bames Mrs. Gandhi for making the mistakes that led to her assassination last October, but also works over the Sikhs who had holed up with their arsenal in the temple.

"One of the reasons for writing this book," says Tully, "is to try to tell the Sikhs that they, too, had made mistakes."

For a dissenting view, there's Punjab -- the Fatal Miscalculation, edited by Patwant Singh and Harji Malik and published in December by Singh himself. He's a journalist, historian and descendant of some of the Sikh merchant princes who erected the buildings of imperial New Delhi. The book is a collection of essays, most of which had already appeared elsewhere, but it does include an original work by Singh in which he attacks the Indian press for inflaming the crisis. These days he has few kind words for Tully's book as well. "He's completely wrong in letting Mrs. Gandhi off the hook," he says, sitting by the fire in his study one chilly New Delhi afternoon. "Indians are besotted by the notion of the BBC's accuracy and objectivity."

Unfortunately for Singh, Tully has become something of a legend in India. His radio broadcasts translated into Hindi are heard by an estimated 30 million people, making him more of a celebrity in some remote outposts than Prime Minister Rajiv Gandhi. "Mark Tully? Mark Tully?" villagers excitedly ask when anyone resembling a foreign journalist wanders through.

Tully is a rangy, cigar-smoking Englishman who gets embarrassed by all this, but he is happy to talk about his book, which he says was a welcome relief from what he calls "the ragbag lack of routine you live as a journalist" and the terrors of electronics. "I'm hopeless with a tape recorder," says the man who makes his living by one, "absolutely hopeless. I'm always terrified that I'll get back and it won't have recorded or the level will be all wrong."

Tully was born in Calcutta 50 years ago, and has been the BBC's Delhi bureau chief since 1972. His book hasbeen published in England by Jonathan Cape, and will be available in the United States this spring. It will soon be out here in Hindi as well.

Hindi, the Sanskrit-derived national language of India, is in fact the medium for much of the country's real literary action. India is one of the largest publishing nations in the world, but most of the English books produced here are nonfiction works catering to the academic crowd. For contemporary urban angst proffered by the new young writers, you have to turn to any of India's 15 official "regional" languages -- the Bengali of Calcutta, for example, the Marathi of Bombay, the Malayalam of the South Indian state of Kerala, or the Hindi of the north.

This might surprise Americans, whose view of independent India has been shaped by the reigning subcontinental superstars -- Salman Rushdie, Anita Desai, Ruth Prawer Jhabvala -- but they generally live and publish abroad. They are admired here, but just as often resented for what is considered their "packaging" of India for the affluent of the West, whose literary tastes then define what is considered good in India. "It's the old reverse colonialism," says Tejeshwar Singh, a veteran English-language publisher. "If they get foreign publishers, they're noticed here."

"If you write in English, you are a little cut off," admits Anita Desai, who does live in India, in an affluent New Delhi enclave with her businessman husband, having spent a "fraught" summer in a failed attempt to set up a Himalayan writing retreat on the border of Sikkim. Too many people and too much commotion, she says. Now she's back, busy writing the script for an Ismail Merchant and James Ivory production of her most recent novel, In Custody.

NEARBY, in an adjacent colony, are two stalwarts of the Hindi scene, Mannu Bhandari and her husband, Rajendra Yadab. Bhandari is most famous for her novel Mahabhoj, translated as The Great Feast, and is now working on a television serial based on 13 Indian short stories. The theme of most of her work, and indeed the driving force of contemporary Indian fiction, is of people struggling to maintain identities in a 5,000-year-old culture where the old values have only recently been at war with the new.

"Urban loneliness is not confined to the western cities," says Nirmal Verma, one of India's leading Hindi writers, who lives in a modest Delhi house on a street populated by children and goats. "It is here, too, and possibly more tortured." A new English translation of his short stories came out in January.

Of course, writers like Verma don't expect to sell more than 2,000 copies of their work. At $3 per hardback, only the elite can afford them, but the elite is busy digesting American imports and reading and complaining about Anita Desai.

Arvind Kumar, the president of the All India Hindi Publishers' Association, says he is trying to get more quality, lot paperbacks produced, but it is tough going in a country where no one even knows the precise size of the book industry. The National Library in Calcutta, India's Library of Congress, says that 17,000 titles in all languages were published in India in 1981, but Kumar says the statistics aren't collected properly and believes there may be as many as 25,000 titles published each year in English and another 25,000 in the regional languages. The National Library admits it has problems in counting, and convened a meeting of publishers in December to figure out what to do.

In Delhi, a new light on the publishing scene is Kali For Women, a small house begun a year and a half ago by Ritu Menon and Urvashi Butalia that will publish books "on and primarily by" women of the developing world. Their first book, a collection of essays on women and religion, is due soon, the fruit of 18 months of missed deadlines, mechanical breakdowns and condescending pats on the head from the men who dominate the publishing business.

"The minute one of us starts throwing a fit," says Butalia, "they'll say, 'Oh Madame- ji, oh Madame-ji, don't shout. Have a glass of water.'" A recent crisis occurred when a supply of paper couldn't be delivered because the rain would have ruined it in the open bullock cart.

Meanwhile, back at Bahri Sons, A Second Paradise by Naveen Patnaik (see Book World, January 5) is on display in the window. It's a seriously chatty coffee table book about Indian court life, with a prominently featured "editor's note" from Jacqueline Kennedy Onassis.

Beautifully designed and lavishly illustrated, it's nonetheless not moving nearly as fast as the other big best seller at Bhari Sons, Lee Iacocca's Iacocca -- attesting to the enduring universality of at least some moral tales from the West.