Sony DSC W7 control dial defect

Question

The sony DSC W7 7.2 mega pixel digital camera has a defect with the mode setting dial. The physical position on the dial especially in the P, auto and playback mode sometimes does not correspond to that on the LCD. I have to move the dial a bit to get to the mode I desire. Is this a major problem and will it deteriorate in time further? Camera purchased in singapore and presented to me in Goa India.What is cost of repairs including replacement of part if required?