A pretty good book summing up the history of India (especially good on British colonial rule) is 'Modern South Asia: History, Culture, Political Economy' by Sugata Bose and Ayesha Jalal. Amazingly Sugata Bose is actually the grandnephew of the legendary Indian freedom fighter Subhas Chandra Bose, who led the Indian National Army uprising during the Second World War. Definately worth a read. Also probably the most definitive, though more challenging, histories of India are by Ranajit Guha, and especially 'Dominance Without Hegemony: History and Power in Colonial India', although I've only read bits of this.

Also on a personal note, look out for anything on india by someone called Benjamin Zachariah, who taught me during my last semester. Hes a bit of an eccentric genius, and I've got a feeling could become a real name in Asian history. Hes already got a biography of Nehru, though I haven't yet read it (too much else to read), and I think hes currently writing something on everyday life under British colonial rule.