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(a) The answer, assuming you are sure you want to work in India
Addressing this question in good faith (as an Indian citizen who chose to study law in the UK as an undergraduate with the aim of working in the UK), the answer to this seems pretty obvious to me, as long as you are sure that you want to work in India. Choose NALSAR. Very difficult to explain without becoming boring (and I don't want to get into too many small details), but British and Indian legal training is very different. The mental outlook, the way things are done... all are very different. There are also concepts that are there in India which are not there in the UK, for example. Loads of other differences in the legal cultures. They are worlds apart at this point. If you want to work in India and are absolutely sure of that, just go with NALSAR, I'd say.
Responses to some potential objections:
1. Going to LSE would allow you to be dual-qualified: Not untrue. But doing your foundational legal training in England, rather than India, when you want to work in India, is a bit... well, meh. Frankly, the best option for being dual-qualified isn't available to you - the two country law degree, a system which, it is true, the British have, and India doesn't. In the British system, you get the option of doing a four year LLB, with two years in the UK and two years in another jurisdiction (the U.S., France etc) - this is a degree that makes you eligible to qualify in both jurisdictions. To take your example of LSE... LSE has a tie-up like this with Columbia University in the U.S. True dual qualification, in a way that would meaningfully make you ready for primary practice in India, would mean participating in something like this. But Indian universities don't have such programmes, sadly. At the same time, being molded, on a foundational level, in a different legal culture would mean you'd have to unlearn/relearn a lot of things, once you came back to India. Had India had dual-qualification degree arrangements with the UK (like how UK unis have with French, German, American counterparts), that would have given you genuinely good preparation for life of practice in India, while also helping you dual-qualify, and help you be ready for practice in another jurisdiction, if you should ever want that choice. Under the current system, LSE would give you fab preparation for practice in England, but not at all for life as a litigating lawyer in India.
2. The headache:
(a) You'd have to do a lot of follow-up study of Indian law after completing your LSE degree, and, in fact, would need to not just take the AIBE, but do a bridging course as well. So abandon any romantic ideas you may have about returning, flushed with success with your English legal education, Nehru-style. No red carpet, only loads more study and formalities.
(b) Knowing India, you'd probably get a lot of snied comments about why you chose to return. India is a country where people tend to look down their noses at idealists, so any talk of returning out of love for country or even love for parents, etc, would be met with raised eyebrows; in their minds, people are more likely to think, 'This person couldn't make it in England, so has come back'. The trouble is, lawyers are not better than non-lawyers in front - indeed, lawyers are some of the most prejudiced, as far as this mentality is concerned. Therefore, you'd need to gain some experience in the UK to dispell any questions about your profile, before coming back to India. The trouble with that is that you'd probably have to end up spending a lot more than just the three LLB years in order to do that because of the British solicitor-barrister distinction, which India doesn't have:
(i) Were you to choose to become a solicitor, you'd need to do a further training course and exam after your LSE LLB called the SQE (which takes about a year), and two years of post-SQE work experience, called a training contract (in England and Wales, you need both exams and work experience to even qualify as a lawyer). Assuming you get a TC right out of university (which would mean the law firm that offered you a TC would pay for your SQE) and don't have to stay here on a graduate route visa gaining paralegal experience or something, you'd be spending six total years in the UK - six years of becoming integrated into the UK professional environment, six years of missing out on being integrated into the Indian professional environment.
(ii) Were you to choose to be a barrister and then go back (barristers are the lawyers in England and Wales who do the bulk of litigation work), like with solicitor training, you'd have to do an additional year of training known as the bar course, after which you'd have to do a pupillage in a barrister's chambers (a one-year-long period of on-the-job training); only after this do you get your practicing certificate. The trouble with pupillage is that it's dreadfully competitive and hard to get, even for the best law students. For many practice areas, your CV for pupillage applications may be boosted properly not just with an LSE LLB, but with a master's (LLM, or if you are good enough to get into Oxford for a master's, the BCL). Therefore, you are once again (and this is if all goes smoothly), spending about five to six years, not three years, in the UK.
The trouble is that those are the only ways to prove that you chose to leave the UK because you wanted to, rather than because you couldn't make it. And with the barrister thing, that's especially competitive. Unlike with solicitor training contracts, barristers' chambers do not fund your bar course training. You join an organisation called an inn of court, and apply to them for scholarships. For international students, they will expect you to demonstrate that you are committed, long term, to a career at the English bar, as might many chambers on your pupillage applications. So you have to fake a commitment you won't have, which is very hard to do (and the British way of doing things may sound elaborate, but is very good at detecting those who aren't committed).
(b) The answer, if you are not sure that you want to work in India
If you aren't sure that you want to work in India, go for LSE. LSE is an absolutely fab law school (I didn't go there). Loads of awesome career doors will be open for you in that case, it has some of the best legal scholars in the world and all that sort of thing. For example, if you wanted to work in a magic circle law firm, your chances would obviously be far more if you were to go to LSE, than if you were to stay in India - that's obvious, LSE is a British uni, after all. Far more LSE students get UK law firm jobs than do NALSAR students. If, at the end of the day, you decide that you do want to work in India, then the time spent outside might count as a worthy sacrifice/good learning experience. And of course, you would be dual-qualified (or eligible to be, if you had taken the degree but not pursued the solicitor or barrister training pathways further).
The only ambiguous