Is it legal to develop a cipher-breaker software/algorithm? What about it's legality in India?
This is going to depend very much on just what sort of encrypted content such software is used to decrypt. For example, if this allows the user to circumvent an access control mechanism to copyright-protected content, it may be unlawful under the anti-circumvention provisions fc the US Digital Millennium Copyright Act (DMCA). If it is used to gain access to confidential communications transmitted electronically, it may be unlawful under various "wiretapping" laws.
To the best of my knowledge there is no law making the development of a code breaking program illegal. But some uses of such a program would be. And if a program was distributed or marketed for such uses, that distribution might itself be unlawful.
This is also, if stated in a general way, a very hard problem. Any well-designed cryptographic system will have a sufficiently large keyspace to make brute-force search impractical. Other known attacks require at least one of: access to a very large volume of encrypted text; access to significant volume of encrypted text and matching clear text; interception of key-distribution channels; interference with key distribution; knowledge of properties of the key-generation system. In short more than just a "program" is needed, and if a modern competently implemented cryptographic system is involved, more than just ciphertext. Obtaining cleartext or other inputs may require unlawful techniques
I would say, that a cipher-breaking software can also be counted as a hacking tool. Therefore the paragraphs concerning hacking apply. Most countries handle this in such a way that only the use against non-consenting third parties is liable to prosecution. As far as I know, India handles this in the same way. This implies that creation and usage with the consent of the parties involved is not a punishable act.
There may be articles unknown to me which provide the context in which said act is illegal. Privileges are also possible for explicit legality in other contexts (e.g. for scientists). Also, local laws or even practical jurisprudence could handle this differently. In addition, most countries have a lively change in their digital media laws, which should also be taken into account. Therefore, one should always do extensive research for one's own context.
The only country I know that criminalises the creation of hacking software is Germany. $\S$ 202c StGB is known as the "Hacking Paragraph" and prohibits the creation of such software. But as mentioned above, this paragraph is highly contested and the associated jurisprudence is not as straightforward as the wording of the paragraph may suggest.