Will I be able to apply for Chinese visa from India and visit China on my way back from India to US?

Prasad, as you hold Indian passport, there is no doubt that you can apply for the PRC entry permit from there. Based upon your description, an M type should be appropriate for your travel. You can apply for it from the CVASC office by providing necessary documents, such as passport, passport copy, application form, bare-head photo, and an invitation letter from your trade partner or Exhibition host.