When Alexander reached the end of the old Persian Empire, he turned back. He did not go further east into India. Historians who were there say that this is because Alexander's soldiers refused to follow him any further east - the end of the Persian Empire was far enough for them.
But the way back to Babylon, through the Gedrosia Desert (in modern Pakistan) wasn't such a good time either. There was almost no water or food, and three out of every four of Alexander's soldiers died before the army finally reached Babylon (in modern Iraq).
Once he was back in Babylon, Alexander began to try to put together his Greek and Macedonian people with his Persian people to make a truly diverse empire. Like the Persian shah Cyrus before him, Alexander thought that respecting religious and cultural freedom and diversity was the best way to hold an empire together. Alexander ordered many of his soldiers to marry Persian women, as he himself had already done. He also employed Persian men along with Greek men in important government jobs (Even Alexander didn't allow women in the government).
But while he was staying in Babylon, in 323 BC, Alexander caught a fever. Nobody knows exactly what the disease was - maybe malaria or typhoid. The fever killed Alexander in a few days, when he was only 33 years old. Alexander left no sons (though his Sogdian wife Roxane was pregnant), and his generals soon divided up his empire among themselves.
Oxford First Ancient History, by Roy Burrell and Peter Connolly (1997). Lively interviews and pictures make the ancient Mediterranean come to life. For teens.
Alexander the Great, by Samuel Willard Crompton (2003). For teenagers.
Alexander the Great, by Robin Lane Fox (reprinted 1994). Lane Fox is a good writer.
The Hellenistic World and the Coming of Rome, by Erich S. Gruen (1984).
The Greek World After Alexander, 323-30 BC, by Graham Shipley (2000). Takes a more positive view of the Hellenistic period than Gruen, but it's not as entertaining to read.