I have been reading on the subject and, I learned how Gmail solves this issue..
Gmail offers an automatic transliteration option that converts Roman characters to the characters used in Arabic, Bengali, Gujarati, Hindi, Kannada, Malayalam, Marathi, Nepali, Persian, Punjabi, Tamil, Telugu and Urdu. This feature lets you type these languages phonetically in English letters, but they'll appear in their correct alphabet. Keep in mind that transliteration is different from translation; the sound of the words is converted from one alphabet to the other, not the meaning.
Such a technology is used for use of the full Wikipedia. It is however not available for Wikipedia on the mobile phone. As a consequence it is not possible to search and find articles. This is an essential ability.
I read some more and found by way of Wikia this excellent website that explains this issue really well for the Malayalam language. It is obvious that this is a well known issue with readily available solutions. It just needs to be implemented.
PLEASE Wikimedia Foundation make this a priority. I understand that India is considered a strategic priority so please do the obvious thing and include / enable / whatever is needed to make mobile Wikipedia work in India and for Indian languages.