Hi Rahulk,
not trying to be a wise ass but a 1000 - 2500 categories, isn't that just too much for people to handle?
With speed, user-friendlyness and performance in mind I would like to keep my categories as low as possible.
You could try to see why there's a 1000 category limit in the current plugin and maybe change that number in code.
Another suggestion of which I am not sure it would work is to maybe use the import several times? (I don't know the plugin so maybe this is a no go)
3rd and last, you could use SQL to fill the category table.
Regards,
Eric