Do you have a showcase of previous work that can prove the quality of your work to potential clients? If not, maybe they think more in terms of $3k being risky to spend on a project when they have no idea if the outcome will be satisfactory or not.

In your case actually $3k sounds really cheap for this kind of project. I would charge nothing less than $20k.

It is big problem now. A client wants to have good looking, fast working app but does not pay at all.

I have also a client who said: "Please build it for me for free. If it will bring money I will give you some"

And I am interested here, why we need him?

We are not investors, we are a development company!

If you are going to work on the project full-time, 3 person $3000, so $1000 for each for 3 months. For a month you will probably gain $250-$300 when you reduce the expenses for hosting.

I don't know the minimum wage in India, but if the price is not 3-4 times more than the minimum price of the employees in the country, I would not say you are charging too much. Of course, this will depends directly on your experience in the field.

Price unfortunately varies greatly depends on market, especially for consulting/outsourcing.

If that price ($3000) is quoted in Silicon Valley for an App that takes 3 month to built (even for just one person), it is probably very cheap.

I don't know enough about the Delhi market to comment on if the price is reasonable or not.

Here's something I've learned recently about pricing:

If everyone says yes to your prices, your prices are too low.

$3k for a custom app using current technology (++ the hosting and bug fixes) is pretty affordable depending on the quality you're outputting. I'd say you can even charge more, you just have to find clients with the money to spend.

This video talks about pricing your work a bit. It's related to design, but you can apply the practice to development, since they're both services you sell: