I am confused whether to buy a midi controller or a midi keyboard. I currently use Yamaha E323 arranger keyboard and want to upgrade to the latest type within a budget of maximum 60000 INR I am not sure whether the style feature in my Yamaha will be available in either the midi controller or keyboard. Also if I buy midi controller, does the software VSTs cost very high? Please suggest which one is better and what is the best option among them that I can go for
From your question, it sounds like you have some quite well-understood and specific requirements for playing live (Indian sounds and rhythms), and some more nebulous ideas about doing music production.
Using a MIDI controller with a computer and VST instruments live is a complicated thing to get working reliably, and as it sounds like you're at a beginner level with learning about that, it's hard to recommend that approach to you for your live playing if you need a solution in the short term.
Many of the big keyboard manufacturers (e.g. Casio, Yamaha, Korg, Roland) have versions of their keyboard made specifically for the Indian market, so one next step you can take is do some research into which of those has sounds and features that suits your live needs best.
Thirdly I want to upgrade to a professional level keyboard with options for recording and music production.
I imagine that few professionals use a standalone keyboard for professional-level music production - the options are just much too limited compared to what you can do with a computer-based setup.
However, if you spend a little more on an arranger-style keyboard with built-in sequencing, you might also be getting better sounds and other facilities into the bargain.
You will only know if that would work better for you for your music production than a computer by experimenting with some modern DAW software and finding out if they suit you. VST instruments can vary in price from free to hundreds of dollars - and there are thousands of them, so doing research there is a big time investment. You should be able to experiment with computer-based music production just using your Yamaha E323 as a controller initially though.
If you aim to do any audio recording, it's likely that you'll need a computer-based setup for that.
In specs you'll find
Connectivity > USB TO HOST > Yes
To know more about how to use this for MIDI input, refer this document.
For Indian sounds (as mentioned in comments) I would suggest you to go with software plugins. The two pro-grade ones are Swar System's SwarPlug and NI's India : Discovery Series. ROLI is also expected to release their much anticipated A.R Rahman Soundpack which would include classical Indian instruments.
I am not sure that this could be defined as one being 'better' than the other. However, from my personal experience I will try to shed some light on how one could go about thinking about it.
I just moved from using Cubase/BitWig and loads of VST's back to standalone sequencer, hardware synthesizers and effect units. (I already had tons of equipment from the past that has been collecting dust for many years.)
Anwyays, I got to the point where I felt that I was spending more time upgrading operating system, sequencer software, and loads of VST's, all the time, as well as dealing with copy protection schemes, than making music. With that and needing to figure out how each VST works with the only documentation being digital, sometimes even only online, I felt philosophically drained and forced myself to make a change.
I am much more productive now, however please keep in mind that many people are the opposite of me and prefer to work with VST's. But like I said earlier, I wanted to reflect my own situation to you.
In my humble opinion, if you like using an arranger, you probably should continue using one, and you can still use MIDI or USB-MIDI to control VST's. If you go with a MIDI controller, you will be dependent on VST's or other sound sources, as well as some form of additional sequencer.
I feel that no one can really answer your question but yourself. So, I hope that my experience can help you make a better decision for yourself.