How can anyone tell you what you need to buy?
how about Lederhosen, wurst and a piece of Berlin wall?
CHOCOLATE! Milka and RitterSport, or more upscale brands like Gubor, Lindt and Hachez. At Berlins Gendarmenmarkt is a famous and expensive shop called Fassbender & Rausch, where you can buy some really good chocolate. Marzipan from Niederegger is a popular too. Right now gingerbread is sold everywhere (try to buy handmade gingerbread, it's much better). Haribo gummi bears are typical German. Mozart balls (OK, technically from Austria, but made by German companies like Reber too).
Other ideas: a photobook of Germany. Blades from Solingen. Jägermeister, Kuemmerling or Wurzelpeter herb liqueur. Wine. A beer mug. Handmade wooden Christmas toys from the Ore mountains.
One can suggest what one place is famous for.. like India is famous for gods, spices, etc
Nischayn ... if you put 'souvenirs' into the search box directly above your post you will find all posts on the topic. You are sure to find some ideas there.
This search box is a function of TA that, as a newbie you may not have noticed
Didn't know there was a word for that.. Still I am looking for things to buy for specific people.. All I found was chocolate
I have thought about this for years (having been in Germany almost evey year since 1966). It is NOT easy. I agree about Rittersport chocolate. Not the best, but excellent for the money. You might go to flea markets - often on weekends. Germany has several high end porcelain manufacturers. They offer coffee mugs and small plates with all sorts of images. Germany also still makes high end knives - but be careful about airport security. Clothing is expensive, but I regularly go to the Goldpfeil Outlet in Hauau (basically part of Frankfurt) and have brought home LOTS of purses, scarves, belts. Some of the little art galleries offer unique objects at reasonable prices. Also museum shops. Larger cities have a store called Manufactum. You can find them on line. Many of their items are big and heavy, but not all. I always visit them when I have a free hour. Larger cities also have shops that sell nothing but buttons. Go in and ask to see thier selection of horn buttons. Germany used to make excellent mechanical pencils. There are several companies that make them at below Mont Blanc prices. Prices on discontinued models are often reasonable. (I can't read your question while typing this, so I may have missed the point. Still, I hope this gives you some ideas.)
I think a major problem is that few people on this forum are from India, and so don't really know what their tastes are.
For top quality gifts, I agree with RobLaw that museum shops have some great ones, oftentimes recreations of thousands of years old pieces of jewelry which are quite nice. I personally like the quarter liter Viertel's, clear wine glasses that come in a large variety of prices depending on their degree of etching and have green handles. Beer mugs come in many styles and materials. The cuckoo whistles from the Black Forest are excellent for children.
But as RobLaw mentioned, good flea markets offer a wide variety of things that are typically German, you can find nice inexpensive things which may be of high quality, and some things are genuine antiques.
As to chocolates, as these are gifts, buy things like Mozart chocolate balls, things favored by tourists, as this is certainly a "touristy" gift.
Well, if you have any beer-loving friends and relatives, save your beer coasters for them. They are free and many have quite interesting graphics.