Does anyone in Bangalore build sugar rockets / some other rockets?
Where can they be fired near bangalore?

Also, which rocket fuel should be used to reach around 5000 - 8000ft? (ofcourse with permissions, etc)
Some people on youtube have achieved 50k feet too 

Friend, 50k feet rrequires serious expenditure. Thats considered to be A-class rocketry.
And as for 5k-8k feet, you can do so. I am not gonna post it here. PM me, ill reply on 12th march (examinations).
The permission is very hard to get. Thats from my personal experience.
Plus, adding telemetry to measure altitude is not my cup of tea.
Regards.

Is it really legal? I though it is illegal!

Hey! Keep updating. I look forward to invest my time in rocketry, in the future. Very much inspired to find people like you, here in the forum.

Also, I know I'm being dumb. Is it by any means achievable by high power EDF combined with a little powerful engine? Is it even possible to DIY such liquid propellant engines?