Yes, Dilli Haat caters to tourists-- but locals go there too. It's a permanent space set up by Delhi Tourism that has rotating and permanent vendors from many different parts of India. That said, anytime we're looking for some souvenirs or trinkets, we head immediately to Dilli Haat.

My advice would be to take a quick look around before you really get down to bargaining-- items can be marked up in the front and you might find a better deal once you've "been around the block" a few times.

So save yourself the "authentic shopping experience" and go to where locals go to buy their gifts.