Those in India, I suggest that they check out http://www.olx.in/ but of course you need to understand that olx doesn't charge any commission for the deals and therefore takes no responsibility of any kind if you get duped. It is better to deal within your city parameters of at least a place where you can personally go and pick the article of interest so that you're free to check the condition. Do not use Western Union money transfers in any case because once sent, you've got no control over the money i.e. you cannot block payments if you find something fishy. They themselves will suggest to you to not send money via their service to strangers.
Having said that I've seen great deals on http://www.olx.in/ within my city and even checked the stuff out. One dude sold an 18-200VR for Rs. 18000 (~USD 350) and the 16-85VR for Rs 12500 (~USD 245). I called him up and he sounded genuine as he was more than ready to have his stuff inspected to satisfaction before it was bought. You see some people just don't understand the value of an 18-200VR. Other people have genuine reasons to sell off their otherwise awesome gear. If you can get a deal like that, you're in luck. However never forget the adage that if it's too good to be true, it probably is and some conman on the other side might be waiting to swindle you. I strongly suggest you buy only if you can go and get the gear personally from the seller i.e. he's located nearby. So in such a scenario, you're not actually buying over the internet, you're just using the classified on the net but that's the way it is.
http://www.ebay.in/ sucks. The kinda price you're offered for most articles is so high that if you go and buy the same stuff over retail store, you're bound to get a biggger discount than the price at http://www.ebay.in/ Halt! I am not talking about http://www.ebay.com/ here but its Indian counterpart. Only saving grace here is that if you buy using your ICICI, HDFC or Citibank credit cards, you have the convenient option of breaking the price down to EMIs of either 3 or 6 months. When using ebay do ensure that you buy from "top rated sellers" with at least 99.5% positive ratings. Unfortunately I haven't noticed the "top rated seller" tag at http://www.ebay.in/ but only on http://www.ebay.com/. Anyway, keep a watch over your money, be extra cautious when dealing at sites like ebay and olx.
You get great offers at www.amazon.com, http://www.cameta.com/, http://www.adorama.com/, http://www.bhphotovideo.com/, http://www.ritzcamera.com/ like big discounts on combos and refurbished gear (with guarantee), only problem is that they won't use a non-US credit card for transaction (the US law forbids them to do so). So you can avail the deals if you family or friend in the US or Canada who can buy it for you and bring it back. Amazon does ship some items to India (they'll tell you if they do when you proceed to checkout) and so does Adorama but then again good courier services are expensive and after adding the shipping cost, it might not remain so lucrative after all. Although not everything gets opened and checked by customs but if it is, you will be charged. I bought a brand new SB400 from ebay.com it was shipped from Hong Kong (by the Hong Kong Post) and was overjoyed at receiving a brand-new original-in-a-box (with all the papers..of course they were unsigned/unstamped). I was charged peanuts for shipping and insurance (I guess it was under USD 5). Only sad part is that Nikon India dropped the price to the same amount I paid in a matter of two months (the way I see the trend, the price might drop further when 2012 starts when they come up with more contraptions and tweaks in the older versions). It's kinda funny how the prices on some of the accessories and cameras drop (you'll notice this is especially true of point and shoot cameras). The price of the P7000 dropped phenomenally after the P7100 was introduced. The two are hardly any different barring a swivel screen and a front control dial; I was depressed when I saw this drop--the story) and here's what I think about the Nikon coolpix P7000 and therefore also of the P7100.
As far as safety of dealing within India is concerned, you might wanna try www.zoomin.com coz these guys offer a return policy and shipping insurance. As far as pricing is concerned, I don't think they offer any great discount and you're bound to get a much better price if you personally go and buy it from a dealer.
I'm oblivious to how stupid it would be to buy a camera from someone like www.homeshop18.com. These aren't camera dealers, they sell anything and everything. These guys don't even differentiate between DSLRs and non-DSLRs. Most of their cameras carry 3-4% discount, only some carry big discounts, so again, it might be worth it because they offer COD.
At the end of the day, you're the king of your castle, so do whatever you feel like, the only advice I'd give is to search a real shop and get the best quoted price from the dealer (yeah the authorized dealers too offer tempting discounts, especially when you reflect that they're the "authorized dealers") and check the internet if you'll get a better deal but yeah, tread cautiously.
Grey market or gray market is something I still have to explore. It's surely risky but I've heard of people paying almost Rs 20,000 lesser than the MRP (yes twenty thousand) for a brand new, genuine D7000. Grey / Gray market has risks; imagine a Rs.50,000 bucks worth of camera turning out to be imperfect, well you get no warranty in grey market so you can't go to the company to replace it or fix it for free. That's the trouble with grey (of course in such a situation like everything else, the rewards are great too).
Cheers! Play safe.