I am from India too but I saw that your suggestion, while quite good, is limited to Bollywood. But there is Indian Cinema beyond Bollywood, so here is my list expanding on your list from our country:

1. Chandralekha : Tamil

An epic film of its time, it was originally made in Tamil and later dubbed in Hindi and became a blockbuster hit. It had the longest swordfight in cinematic history at its time. (Source: https://en.wikipedia.org/wiki/Chandralekha_(1948_film)#Impac...)

2. Pather Panchali : Bengali

I can't forgive you for missing this one. Along with the Apu trilogy, this was the masterpiece created by the best film maker India has ever known Satyajit Ray

3. Harishchandrachi Factory : Marathi

If you haven't seen this then I would urge you to see this Marathi movie about the man who brought the world of cinema to India - Dadasaheb Phalke.

4. Moonram Pirai : Tamil, Sadma in Hindi

Popular in its hindi versin Sadma, this tells the story of a woman who looses her mind after a car crash and ends up in a brothel later rescued by a lonely school teacher who takes care of her and eventually falls in love with her.

5. Anbe Shivam : Tamil

Explores different philosophies such as socialism, nihilism and atheism through the eyes of Anbarasu, a modern day guy stuck in a cyclone with a cripple by the name of Nallasivam. An excellent movie and a must watch.

6. Katha : Hindi but not mainstream Bollywood

A hindi movie in 1983, it turns the classic Aesop fable of the Rabbit and the tortoise on its head. The movie tells the story of the honest and hard working Rajaram and how he is taken for a ride by his smart-ass friend.

7. Kanchivaram(http://www.imdb.com/title/tt1286811/?ref_=nm_flmg_dr_11) : Tamil

The story of a highly talented but impoverished silk weaver whose only goal in life is to weave the best silk sari for his daughter for her wedding. But silk weaving is completely controlled by the inconsiderate mill-owner. What can the weaver do to bring his dreams to life?