Rahul,
Imported products sold in Indian Rupee are governed exactly the same way as those manufactured and sold within the country. Country of origin has nothing to do with the rules governing the sale and warranty of the product. Do note that you are allowed to sell any product without any warranty at all even with a VAT bill. The bill and warranty are mutually exclusive terms.
And yes, if there is no global manufacturer warranty you are free to make up your own warranty terms but (and this is important) the warranty you offer in spirit and letter must be compliant with laws of the land. Depreciation is not allowed if you have warranted the product and have judged no mishandling takes place.
Look if you buy a car the market value of the car depreciates. But not the warranty value. If you have an accident the repair parts are charged keeping depreciation in mind (glass 0%, plastic 50% etc). But if the engine blows due to a manufacturer defect, the entire engine is replaced or repaired at manufacturer cost. Customer is not charged for it.
Existing business practice as may be prevalent does not exclude you from warranty liability. It is fair that buyer and seller may agree to terms that are not completely in line with the law. In a court, that agreement is worth nothing. I'm not suggesting you're making up warranty terms as you go along - I'm sure it's there on your site as well (I haven't checked) but it's not a valid agreement
The trouble is that almost every person in this (your) business is (and don't take this the wrong way) not fully grounded in the legalities of running a business as the origin of these kind of business have been in trading rather than branding and customer relationship. This is not a snide comment, as the phenomenon is new and it's just an observation. Having a site online and a B&M is not enough - people need to be dealt with, with all the issues and problems that come with it.
The transition from a store to a community is not easy to understand even for brand and social media professionals such as me. However, I can tell you that being aggressive to the community that forms your customer base is not the best way of building traction in that community. It may not be of sufficient importance to you, and that is fine. You could probably do without the dealership - and my earlier interactions with you indicate that your business does not depend critically on this forum or any other. However even separation can be amicable.
Now.
If you have no stock of the product in question offer a credit note for full value (my opinion), or replace with a higher product after offering full value credit. You will lose margin on the second product and it will take you a bit of catching up to make back the two values, but you will be more careful about setting up terms. There is no cost you can put to learning how to do business, and in my mind the amount is very small. Customers will always be unreasonable. I have seen this in many businesses over my working life, and this is true. As a businessman, my job is to ensure they stay happy and I still end up making money. This is not an easy task, but what is easy is to understand that a bunch of people angry at you and writing about it where thousands of people can see it it not really a great thing for any business.
The buyer has several options - he can accept, refuse on moral grounds, refuse to back off, or drag it into a legal system. The forum can actually do nothing except persuade and make you see sense (I'm not sure banning a dealer is any solution). I do hope you realise this is a PR disaster for you, but it's still possible to turn it around if you juggle the numbers a bit and look at the bigger picture. I understand it is money, but sometimes some things are more important to run a business.
I leave it to your discretion and business sense.