You cannot get it for $199 UNLESS you agree to a 2 year contract with Verizon. That's because Verizon pays Apple the difference between $199 and the actual cost of the phone, then they get it back over 2 years with the monthly charges.
You also cannot activate the GSM capability until it has been activated with Verizon.
Using a Gevey SIM makes you a criminal. It is actively illegal to use it in most countries.
Save yourself the trouble and buy your iPhone in India. That way you will be completely legal, and you will be able to get support and service if you have a problem.
You are probably not eligible, as you must have a US address and a US credit card billed to that address. Assuming you can qualify for that, the cost will be around $100/month (plus or minus, depending on the plan you choose) for 2 years. If you cancel the contract before the 2 years are up there will be an Early Termination Fee which will essentially be the difference between the subsidized cost of the phone and the retail price for an unlocked phone.