In India, gifts received from close relatives are not taxable income to the recipient, and your sister qualifies as a close relative; unless she is a distantly related "cousin-sister". A daughter of your parents or a daughter of your parents' brothers and sisters qualifies as a close
relative but once again, children of "cousin-brothers" and
"cousin-sisters" of your parents are not close relatives. But, in case
the Income Tax inspector in India has questions, you should send
your sister a letter informing her of the gift,and she should
you a reply letter accepting the gift. This can even be done in reverse
order: your sister can request that you give her a gift, and you
can comply with the request. As always, copies of all such correspondence
should be kept in triplicate, and if your sister's lawyer wants
things on "stamp paper" (I assume this what the "bond paper" you
refer to is), ask the lawyer to create a request for a gift on the
appropriate stamp paper and send it to you by paper mail or courier
service, leaving enough space at the bottom of the page for you to
write "Dear Sister,
I am glad to give you the gift that you have requested."
There is no US stamp paper.
There is no gift tax in the US for gifts under $14K (even gifts to made
to strangers, let alone your cousin-sister). There is no letter specifically required in the US to make a gift, but a nice signed note, even on multipurpose copier paper, should be sent to your sister, and
as discussed above, for purposes of satisfying the Indian Income Tax Authority, she may need to send you an acknowledgment and acceptance of the gift.
Finally, there is no US income tax implication with regard to
the gift. In particular, you do not get to deduct the amount
from your taxable income on Federal (or State) tax returns.