GSM and CDMA are the two main competing network technologies deployed by cellular service providers world over. Understanding the pros and cons of both the technologies will help you make right decision according to your requirement.
GSM ( Global System for Mobile Communications) originated in Europe in 1990. The GSM Association is an international organization founded in 1987, dedicated to developing, providing and overseeing the worldwide wireless standard of GSM. While CDMA (Code Division Multiple Access ) is a proprietary standard designed by Qualcomm Inc in United States and has been the dominant network standard for North America and parts of Asia. It became an international standard in 1995.

However now, GSM networks have penetrated the United States and the CDMA networks have spread in other parts of the world. People of both the camps claim that their architecture is superior to the other.

The Technology:

Mobile personal communication systems use microwave frequencies above 800 MHz for transmission and reception. All service providers operate in some pre allocated frequency bands according to international standards. For operatig in these microwave frequencies there are following access methods:

  • ~ FDMA ( Frequency Division Multiple Access) - FDMA puts each call on a seperate frequency.
  • ~ TDMA ( Time Division Multiple Access) - TDMA assigns each call a certain portion of time on a designated frequency.
  • ~ CDMA ( Code Division Multiple Access) - CDMA gives a uique code to each call and speards it over available frequencies.

GSM is a global standard based on TDMA. It is very popular in entire Europe, Middle East and Asia
while CDMA is the dominant technology in United States and some parts of Asia.
But how does it effects the ultimate consumer ? I hope following considerations may be helpful.
1.In case of GSM you can choose a handset seperately from a wide variety available in the market. It should be GSM 900/1800 compatible for use in India.  
Then buy a pre-paid or post-paid SIM card (Subscriber Identity Module that contains user account information) from any of the GSM Service Providers like Airtel, Vodafone, IDEA, MTNL, BSNL, Aircel, Spice etc. Just insert this SIM into your handset and start talking. 
1. Handset is network locked. You buy a package from the Service Provider like Reliance or Tata Indicom that includes a handset and a pre-paid or post-paid plan.  

Earlier it was difficult to change the handset and keep the same number but now to change a Reliance handset in future, you just need a handset change card costing a nominal amount.

T-SIM enabled handsets of Tata Indicom can be changed easily. 
2. A very large range of handsets to choose from as the big handset companies like Nokia, Samsung, Sony, LG,  etc. are marketing their products through independent distribution and retail network. 2. Choice of handsets is limited to the models offered by the Service Provider. Although both Reliance and Tata have now a range of entry level, mid-segment and features rich advance handsets available with them.
3. You can easily change the service provider and continue with the same handset. 3. You can't change service provider and continue with the same handset. It could be technically possible but not easy.
4.In GSM different frequencies are used across different cells but that does not mean that voice clarity is necessarily compromised. Actually it depends upon the location and network traffic too. 4.Voice clarity is supposed to be better in CDMA network as it uses same frequency across all cells. 
5. EDGE (Enhanced Data Rates for GSM Evolution) enabled GSM networks are comparable in terms of download speed. Please note an EDGE enabled handset is also required. 5. Data Transfer Speed is traditionally more in case of CDMA. BREW(Binary Runtime Environment for Wireless) technology which is exclusive to CDMA networks enables faster data downloads.
6. GSM service providers are better networked globally to offer international roaming. But you must check for roaming call rates and coverage in the regions or countries where you visit frequently. 
6. Check for International roaming tie ups if you travel abroad frequently. Also check for the coverage in the region where you intend to use your cellphone within India. 

Tata's T-SIM enables international roaming with one world one number concept.
7. If you travel to other countries you can even use your same GSM cell phone abroad if it is a quad-band phone (850/900/1800/1900 MHz). By purchasing a local SIM card with call value and a local number in the country you are visiting, you can make calls against the card to save yourself international roaming charges from your home service provider. 7. CDMA phones that are not card-enabled do not have this capability. 

Also you must consider the following while selecting a Service Provider:

1. First of all you must check which Service Providers are providing services in the areas where you will be using your phone.
2. If you want National or International Roaming then also check whether the Service Provider you have chosen facilitates roaming in the regions or countries where you visit frequently.
3. Cost of owning a handset
4. Cost of having a connection
5. Fixed monthly expenses
6. Usage charges.
7. Also it is helpful to check with the people using mobile in your area for the quality of service.