I am a student in France and my 1 year visa expires on August 18th. I will be applying for the renewal of my visa in the next 2-3 days. I am planning to travel to India in July and return back to France around August 9th (a week before the expiry). Could anyone please help me by answering if there will be any issue with this.
You probably won't have problems getting in as long as you have a return ticket to India before the expiry date.
If your visa gets extended before your return flight that's of course not going to be a thing at all, if it doesn't you may be in a pickle if you haven't arranged for leaving France before your original visa expires.
Do not expect border control to just think "oh well, they asked for an extension so let's go easy on them" though you never know, it may happen.