Safer normally means heavier. I'm not sure of fuel costs in India, but this Renault has a 800cc engine
1 is true, but I assume the Renault will have a warranty, dealer support etc
2 I'd doubt it. Older Mercs were over engineered (the last of which was the w124) - it's not rare to still see them today, whereas other marques from the era are in scrapyards
As an alternative available in India for sale now, consider the VW Polo: https://www.cardekho.com/overview/Volkswagen_Polo/Volkswagen..., available for ~$7800 with dual airbags. True, that is nearly twice the price, but the safety results at http://www.globalncap.org/results/ (bottom, with airbags) speak for themselves. I know everyone has a different price on safety but buying one of these second hand, IMO, would be a better investment than buying the Renault new.
In the Global NCAP page above, it seems that the Kwid was re-tested and in subsequent tests, it looks like the passenger cell retained its integrity.
1 is true, but I assume the Renault will have a warranty, dealer support etc
2 I'd doubt it. Older Mercs were over engineered (the last of which was the w124) - it's not rare to still see them today, whereas other marques from the era are in scrapyards