Hello Krishna
It is often confusing to think that you need one routing protocol (IGP) to allow another routing protocol (BGP) to function. It sounds quite inefficient and redundant. However, that is how BGP works. Think about it this way. Networks are arranged in Autonomous Systems (AS) that are self contained. Within these AS, we have many routers that employ IGPs such as EIGRP or OSPF. All routing within the AS is achieved using IGPs.
eBGP functions as a mechanism for routing from AS to AS, and it is only the routers on the edges of each AS that participate in eBGP. eBGP requires a connection between two routers on the edges of two different AS so that routing can take place from AS to AS. So eBGP takes care of routing from one AS to another.
Now iBGP is the mechanism by which these edge routers learn about the routes internal to an AS so they can be advertised to remote AS via eBGP. But this info has to reach these edge routers somehow. This is done using iBGP. However, iBGP does not take care of routing within the AS, but it does take the information from the IGP and distributes it among iBGP routers so they are fully aware of all the networks within the AS.
Remember that iBGP peers need not be directly connected, and peering forms only if there is a route between the peers. These routes are provided only by the IGP (or static routing).
I hope this has been helpful!
Laz