I am a US citizen planning to travel to India and I hear the shopping there is quite fair. In particular the electronics. I want to get a few items to bring back home with me. So are there any restrictions? In addition to this, I am not aware of the taxation rules regarding imports.
Straight from the source:
If you are a U.S. resident returning from a foreign country with goods acquired abroad in your possession after a stay of 48-hours or more, you may be eligible for a personal duty-free exemption. If you are returning from Mexico, the 48-hour rule does not apply. The personal exemption you are eligible for depends on the country you are returning from.
For instance, if you are returning from countries other than the Caribbean countries or U.S. insular possession you are entitled to an $800 duty-free exemption and the next $1,000 worth of the goods you purchased is subject to a flat rate of 3%. If the value exceeds $1,800, the remaining duty will be determined based on duty rates in the harmonized tariff schedule, which are generally between 0-10% (except for clothing and textiles, which can be much higher, up to 25%).
If you are returning from a U.S. insular possession (i.e. U.S. Virgin Islands or Guam) you are entitled to a $1,600 duty-free exemption and the next $1,000 worth of the goods you purchased is subject to a flat rate of 1.5%.
If you are returning from a foreign country other than Mexico and were not there for a total of 48 hours you are entitled to a $200 duty-free exemption and the next $1,000 worth of the goods you purchased is subject to a flat rate of 3%. If the value of your goods exceeds $1,200, the remaining duty will be determined based on duty rates in the Harmonized Tariff Schedule.
"Resident" here basically means anyone who is not on a visitor's visa, and includes not only citizens and permanent residents (obviously) but also students (F1 visa holders), H1B visa holders etc.
As asked in the comments, there are restrictions on importing counterfeit goods, but individuals are allowed to bring single instances of a counterfeit item so long as it is for personal use. So importing one knock-off Prada bag is fine, bringing two more for your friends is not (even if the counterfeit brands are different on each.) Full details are to be found here Customs Directive 2310-11A .