The concept of alternative fuel is yet to be accepted in the country. Diesels have very recently got acceptance in India, five years ago the only common man diesel one could think of was the sluggish Indica ,Indigo line up. Today there is a host of products available with the diesel option.
Diesels are priced higher than the petrol - people still buy it because its cheaper on the longer run.
However if the price difference is more than 40% of the car's value people might still go in for the diesel variant.
I've personally seen just one Prius in Mumbai till date.