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I want to create spatial data for entire India.
Usually I use WGS84 as GCS and UTM zones for PCS in the places in India, but when I have to create the spatial data for entire India, I get confused which geographical coordinate systems and projected coordinate system will be suitable.
What are suitable ones?
If you are creating Vector data, then it's best to keep the data in a geographic coordinate System with WGS84 as the datum.
With today's technology, there is no specific advantage to keep your vector data in a custom projection. 6 decimal points are enough to have meter level accuracy, and you aren't going to need any more. Projection on demand is fast enough in today's world; And you have the advantage of being compatible with most global sources like Satellite Imagery and GPS devices etc.
You shouldn't use a UTM zone, since India is covered by several zones, and big states like AP & MP themselves are covered by several UTM zones.
If you are dealing with any Governemt body, do note that you need to follow the NNRMS standards given in the NNRMS document. While the document clearly states (page 47 section 66.4) that you should store the data in Geographic Coordinate system, all government organizations that I have worked with, store even the vector data in the national or state projections.
Update In Feb 2016, these coordinate systems were added to the EPSG Database. For example, look at https://epsg.io/7755
Second Update This projection is now available both in the ArcGIS platform, as well as QGIS, Gdal and other projects which use the updated PROJ library.
If you are digitizing from SOI TopoSheets, It is even more complicated. Firstly, many experts believe that it is not legal to scan and digitize SOI TopoSheets. Secondly these toposheets are in a poly-conic projection, based on the Everest Spheroid & Modified Everest Datum. The coordinates on these maps are shifted quite a bit when compared to coordinates in the WGS84 datum. Hence you need to take care of this datum transformation.
The existing answer gave some good technical advice about datums coordinate systems. However, depending on your map use (a related task), you may want different projections.
Are you mapping the density (people or $ per area)? You want an Equal-Area projection. Are you showing distances between places? You want an equidistant projection. General navigation map? Use a conformal projection, such as Asia Lambert Conformal Conic, or a compromise projection.
A great web-based tool you can use is http://projectionwizard.org/ which will allow you to define your area of interest and the distortion property you wish to conserve. It will then give you a suggestion of suitable projections. If you are an ArcMap user, you can pick similar projections, then edit pre-defined coordinate systems to change the standard parallels and center of origins to match.
