Desicritics.org has a post by Sujatha Bagal:
My search for Indian books for N was proving to be hopeless. That is, until I found Read India Books, quite by accident. I found Indian stories with Indian characters set in Indian households, towns and cities. The language was excellent, not childish but definitely child friendly.
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If you’ve been looking for high quality children’s books in Indian languages with Indian stories told well but have been disappointed so far, I say your search has ended.