I can not read Hindi very well, and I have not read too many English novels written by Indian authors, but here is my list from the books that I read - in no particular order
Malgudi Days - RK Narayan
It is a collection of short stories - each of which deftly describes an aspect of life in a small Indian town of 1940s ... One of the Indian classics, I think this book is extremely entertaining, and is an all time favourtie of mine.
Volga se Ganga - Rahul Sankrityayan
Theists may well be offended by this novel, but I believe people should read this. (After all, respecting others opinion is an important part of growing up) It is a narration of the 'pre-history' of the Aryan race. Through the story of individuals Rahul Sankrityayan has wonderfully illustrated the soceital conditions and power equations of different periods in history upto the time the Aryan race settled in the Sindhu region and starting ruling over most of North India.
5.Someone - Chetan Bhagat or Immortals of Meluha - Amish Tripathi
Disclaimer - This entire suggestion is biased by my personal dislike of a lot of books. That makes me club actually a very wide range of books under a single 'genre'. But you asked for an opinion, and am providing one. So try not being biased by my bias :-P
I quite liked the first book of the Shiva Triology (The Immortals of Meluha by Amish Tripathi). So if you like my other suggestions, you should probably read that. But that is one of the very few 'modern Indian English novels' I liked.
I really dislike Chetain Bhagat (and almost all 'modern' Indian authors writing in English for that matter). But many people really enjoy the genre, and it is stupidity to not try a genre. This is one of my least-disliked books from the genre and much more representative of the genre than The Immortals of Meluha.
If you like any of these books, you should probably choose 5 (or at least 2) from . If you like them, go on and read more :-)
The Namesake - Jhumpa Lahiri
This novel captures the conflict of cultures many second generation immigrants face - on one side their parents expect them to hold on to their Indian root, on the other hand, their social and cultural environment is very disctinct from what their parents grew up in. Am not making a very good job to describing this book, so am copying from Wikipedia - Moving between events in Calcutta
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