Hi Smriti. To give USMLE, a student must be in or a graduate of a medical university which should be listed in World Directory of Medical Schools.
No, it is not compulsory to give USMLE step 1 after completion of 1st year. However, students prefer to give it this way as STEP 1 syllabus consists of Anatomy, Biochemistry, Physiology, Pathology, Pharmacology, Microbiology- subjects which constitute a huge part of 1st year and also 2nd year syllabus. Hence, it will be less work load for STEP 2 and STEP 3 and not much time is needed for revision as you have studied the subjects the last year itself. However, these steps can be taken in any order.
STEP 1 and 2 can be taken in India, but STEP 3 has to be given in the US. So, it completely depends on you, your method of preparation. If you decide to give it after completion of your MBBS, and you take time off for preparation (all the 3 steps) it will take approximately 6 months-1 year. The overall budget should be 10-20 lakh. Good luck!
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