I don't get why the 500 is 50% more expensive than a 350 in India. Must be some strategic reason i guess.
If you look at SAME bike frame with 350 vs 500 cc, then it is not that much. The difference is more like 20 to 25%.
This difference may be due to two different fuel delivery systems in Indian bikes - mechanical vs electronic.
ALL 350 cc bikes have carburetors, but
most of 500 cc bikes are fuel injected. There are some 500 cc bikes in India which have carburetor. One has to look for the same frame, same model, or even color scheme for a realistic comparison of price difference between 350 vs 500 cc.
Classic 350 ............ 131,369 Rs
Classic 500 ............ 167,534 Rs