I have been using a Kindle reader from the first edition – Kindle DX, upgrading to Kindle Paperwhite 3G, and now (April 2018) I had bought the latest and greatest: Kindle Oasis 7″, for Rs. 21,999. This is a lovely ebook reader, probably the best one out there.
If you can spend this price, go for it, otherwise, Paperwhite may be adequate for most users. Remember, Kindle reader is still black ‘n’ white, while it does display comic books (in colour) and PDF files, it still struggles with anything other than simple PDF files.
I had also bought a case to keep the display safe, the one I selected was called Taslar Flip Case Protective Cover for Kindle Oasis, it cost Rs. 699.
The new edition of Kindle OS, supports Tamil ebooks very well, the reader supports search in Tamil text. Amazon India now has a good selection of Tamil ebooks as well.
Update 2019: Kindle now ships with a full-featured Tamil Dictionary, seen below: