State where you want to go. 1. "Good Price." This is the initial price you will be quoted. Never accept it. (I.e. 100 rupees.) 1a. Counter with half. (ie Rs 50)
2. "Indian Price." The Good Price minus ten percent. Never accept it. (ie Rs 90) 2a. "Very Good Indian Price." This is the Indian Price minus another ten percent. This will continue a few more times, depending on gap between your original offer.
3. Walk away--this is your most powerful bargaining tool. They know just as well as you do that there are 20 other drivers who will take you where you want to go, and they can't afford to lose your business. ("No, then I find someone else")
4. Wait for them to call you back. Restate your original offer. (Rs 50) Wait for them to grudgingly accept.
5. If you feel bad, know that you're probably still paying more than what locals would for the same ride.