RE: NAV 2013 Localization
Hello Rishi,
I am not quite sure it's the best idea to try to handle different localizations with a single database. From my experience, it's much easier to have one per each. You will never have to fear some update affecting a common object in a way that can't be adapted for both localizations (different updates per country).
Also, I'd say that the end customer's license cannot have both country codes in it. It is my believe it is "single localization" only. So you'd need two licenses either way.
Why do you need to do it in a single database?
As far as handling in SQL instances, you can perfectly run two localized versions different between them in the same SQL instance. The problem you might run into is when trying to run the NAV Server. Differences in builds (which is a probably thing to ocurr) makes the NAV server do some weird things. I've lived that and it's frustrating. Best approach from my perspective would be different NAV servers on different machines (although not necessarily different SQL Servers) if possible, unless it's a testing environment you don't plan on updating.