I am a developer from India working on a game in WP7. I need to know, can I sell my game in Windows phone apps marketplace or is it like Android market where only free/ad-based is allowed?
AFAIK it's absolutely OK to sell apps on Windows Phone marketplace. However you need to pay developer membership fee (which is 99$ per year), and submit your app (i.e. game) for certification.
I recommend you to check such info before starting working on a product in a future :-)