Re: 2011 Brides
Awe - congrats girl 
That is exactly how my engagement was done … nice and simple with my family and a few friends. It was simple in that regard but my mom really went all out and made it very elegant. My mom and dad got my fiance alot of gifts but in regards to the Engagement itself - they gave him a watch as is customary in our khandaan. He luvs it and wears it all the time now. 
I didnt even get to see it until my dad put it on his wrist (sweet moment!).
My ring was one he chose and paid for himself
p.s. my baat paki happened so suddenly (surprise from my fiance) and then engagement was only a few weeks after that… so i had VERY little time to get an outfit… but it ended up working out great… and I got 3 outfits. lol. One from my parents and 2 from his. I only wore two of them that night… first the one my parents got for me and then i changed and wore one of the ones his parents got for me.
Parents gave me a dark green Anarkali … well suited since it was december. And my inlaws gave me one maroon and other pink/turquoise combo suits. I wore the pink one later on.
Aweeeee haha. Well my fiance and I are shopping together and choosing our own wedding bands. But in regards to my engagement ring - it was a complete surprise and it was gorgeous. It’s a “rock” … princess cut solitaire with a platinum band. My fiance chose the diamond itself himself and designed the setting as well. It was all him… he knows me well because I would have chosen the exact same thing if I had the option! lol.
I dont think you should give back the engagement ring your inlaws gave you.. it might come off as rude… save it as a memory sake And you can always wear it as a normal ring for functions as opposed to wearing it everyday as you would an engagement ring.