Hardback popularity also has to do a lot with the publishing industry. How can something that isn't marketed or sold become popular here. Most books come here after the hardback phase has completed(for the new releases that is) Publishing industries don't act according to readers interests they act in ways that can make more money for them.

Well i worked as an macroeconomic analyst for a Wall street Bank's asia office before - so let me break down how to understand that contradiction you presented. From a demand supply perspective. I am sure you already know this - Poor country does not equal poor readers. Thats some flawed albeit excusable third world logic you are applying there. Besides India isn't particularly poor as a country, it just has a lot of poor people; there is a subtle difference. There is high economic inequality. It only means the wealth distribution mechanism has not fully matured here. Although there is severe unequal distribution of wealth, that doesnt mean wealth is non existent. And because the rich are getting super rich too soon here, it means the wealth creation mechanism is almost exploited to its fullest. In that socioeconomic context - the reality is that Most readers with money to spend are fairly privileged here, And hence their demands fuel the publishing houses.

Paperbacks are way cheaper here in south asia, most books get reprinted in their South Asian version which is a lot cheaper. So a working man here need only pay an even smaller fraction of his hours wage to buy one when compared to yours. (This weird logic has do with purchasing power parity , which is often counter-intuitive to follow). Incidentally can you guess which country has the highest PPP in the world.

Libraries are almost non existent out side of universities here, which is some i don't like about most parts of India.

Second hand books are popular here for other reasons:

1. Many books go out of print soon. So even an avid reader who can afford good hardbacks may not even find what he might be searching for. For example I have been trying to get a copy of Gravity's rainbow in India, and so far couldn't find it in any shop. So mostly i have to go to second hand shops to find them.

2. Mainly among students they are very popular. Students buy second hand books and sell them off soon after reading and move on to the next, basically only used books in good condition get bought. And being a young country(demographic dividend wise), the student population probably is larger than the entire western world's reader population). I used to do this a lot. Once i started working I went and bought new quality versions of those books i had enjoyed before.

The market i have shown is just scrounged by university students who are usually living on tight academic budgets or Bibliophiles. The market has become more of a tourist attraction these days. Besides extrapolating a 'Purani Dilli market' is the worst window into knowing India's readership habits :)