The GTS250 is a great card. The 5670 is a good card too, but my personal preference would be the GTS250. Agreed, the 5670 will give you DirectX11, but again, in my opinion, that isn't the 'most' crucial characteristic for making a choice. I've been using a GTS250 for a while now and am very happy with it! DX11 is utilized in very few games as of date. Upcoming titles may have it, but its not certain how many will utilize it. What you also need to know is that DirectX11, when switched on, tends to lower the performance overall.
For a mid-range card, I don't feel DX11 justifies! Yes, if you're using something like an i7/ i5 processor, 6gig's RAM, a higher end GPU then you won't mind getting DX11. But for the 9800GT/ GTS250/ HD5670 range cards, I wouldn't look at DX11 as a major factor for the card.
Bottom line: don't consider DirectX11 as the main/ sole factor while deciding on which card. It's good eye candy, but your CPU would need to be good enough to compensate the performance, coz it'll surely give a drop in frames when turned on.
The GTS250 requires min 450W
The 9800GT requires min 400W
The HD5670 requires min 400W
The HD4850 requires min 450W
Imo, a PSU upgrade is recommended. They're not that expensive these days. I got my CoolerMaster 650 Extreme Power for 4K a year ago....those prices will be much lesser now.
As for buying the card, I did a whole lot of research while buying my GTS250 (though a year ago). The prices on the websites tend to be a bit higher than what you can get from the market. Chandigarh is about 4 hrs fro Delhi. If it's possible, I would suggest you check the prices in Nehru Place Delhi (got mine from there). It's a great place for hardware's! I mean, you'll find 'anything' there. You should get the GTS250 for a good price there.
Regarding your friend's opinion about ATI, for some reason nVidia finds favour in the Indian markets. Whenever I've gone to the markets, almost all the vendors seem to be inclined towards nVidia. I'm not saying for a moment also that you should drop ATI because of this! Just giving you the mindset of vendors/ suppliers. If you've done your research properly, there's no reason why ATI should not be considered. It's just a general mindset here that nVidia is better. Plus, most vendors deal in nVidia, so if you were to pick up an ATI, you may have to do a bit of running around in case of any problems with the card.....IF any problem should arise! Of course, if you're buying it online from amazon/ ebay or such other place, it's a different (easier) thing should you have a problem with the card as you can opt for the standard return policy, etc.