Does an Indian citizen child automatically lose Indian citizenship if
he acquires the citizenship of another country (via the valid act of
his parent or legal guardian) by applying for naturalisation or
registration, or acquires a foreign passport?

I think that the rules are changing - or have recently changed.

My understanding is that until recently India would not allow dual citizenship.

A largely academic problem (ahem)

All Overseas Indians Will Be Eligible For Dual Citizenship


January 07, 2005 
All Overseas Indians will be now eligible for dual citizenship and
exhorted the diaspora to invest in India and its future in a large
way. Delivering the inaugural address at the opening of the third
Pravasi Bharatiya Diwas 2005 Prime Minister Manmohan Singh said: "The
government has decided to offer dual citizenship to all overseas
Indians who migrated from the country after January 26, 1950, as long
as their home countries allow dual citizenship under their law."
Around 2,500 overseas Indians arrived for the three-day event, which
is being held in the backdrop of the tsunami devastation in southern
Indian coasts and the Andaman and Nicobar Islands. Mr. Singh said the
government had received several representations against the original
approach of notifying some selected countries for dual citizenship.

Announcing extension of the facility to all overseas Indians, he said:
"A day will come when every single overseas Indian who wishes to
secure Indian citizenship will actually be able to do so." He pledged
himself to work in that direction.

Mr. Singh said the "government will also simplify the application
forms for citizenship for overseas Indians". A new user-friendly form
combining the three forms prescribed earlier had also been evolved and
would be notified soon, he said.

Under the dual citizenship, the Persons of Indian Origin (PIO) are
granted the Indian citizenship and get all benefits, but they cannot
vote in Indian elections.

In fact, the process of granting dual citizenship to Indian
expatriates has already begun. Manju R Jehu, a resident of Australia,
became the first PIO to be listed for dual citizenship on November 1,
when the Indian Embassy in Australia registered her in the presence of
Mr Tytler. Parliament amended the Citizenship Act for the purpose last
year.

Due to security reasons, the dual citizenship facility was extended to
PIOs of 16 countries only - Australia, Canada, Finland, France,
Greece, Ireland, Netherlands, New Zealand, Portugal, Republic of
Cyprus, Sweden, Switzerland, United Kingdom, and United States of
America. Now it will be available to all PIOs across the world. There
has been a demand from overseas Indians to grant voting rights as well
but this has been specifically denied under the provision of dual
citizenship.

According to officials of the newly set up Ministry of Overseas Indians Affairs:

1. An expatriate holding dual citizenship does not require visa for
travel to India. That person will however need to present passports of
both the countries while traveling to and from India.

2. Once a Person of Indian Origin (PIO) gets dual citizenship, he is
issued a registration certificate and an overseas citizen passport.
This passport along with the passport of the country of which he is
resident and a citizen, is necessary for travel to India.

3. There is no need of going through registration formalities for
staying in the country, which a foreigner is required to undergo.

4. A dual citizen does not need separate documentation for admission
in colleges/institutions or for taking employment.

5. The dual citizens have been granted parity with non-resident Indian
in respect of facilities available to the latter in the economic,
financial and educational field.
6. The children of dual citizens can avail of the facilities for
obtaining admission to educational institutions, including medical
colleges, engineering colleges, Its, Items, etc. under the general
category.

7. The dual citizen can also avail facilities under the various
housing schemes of the LIC, state government and other government
agencies.

8. The dual citizenship seeks to remove the obstacle in travel to and
from India and permit investment in business ventures and foster a
greater sense of belonging. It also seeks to facilitate easy
technology transfer.

India to Allow Dual Citizenship 
 

Indians who seek a better life in the USA will no longer have to
forfeit allegiance to their own country if they plan to become
American citizens.

 
 
 
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Currently, ethnic Indians living abroad have to forfeit their native
citizenship if they leave India to live and naturalize in another
country.

But recently, Prime Minister Atal Bihari Vajpayee made an announcement
that things will be changing. The details were outlined at a gathering
in the capital of New Dehli, where 1500 nonresident Indians, including
Nobel laureates, businesspeople and politicians, gathered.

India will be allowing dual citizenship for those of its people living
in the United States and several other affluent countries, in an
effort to spur  investments in Indian markets and put to rest a
longstanding irritation among ethnic Indians. Although they probably
won't be able to vote while living abroad, Indians will be able to
visit their homeland without visas now. Or guilt. Many have been
plagued by their decision to renounce their Indian citizenship when
all they really wanted to do was give their families a better life in
a much more economically sound country. It never meant they wanted to
give up their cultural backgrounds, ethnic identity or ties to their
native country.

Citizenship will be granted on a case-by-case basis. At the moment,
only ethnic Indians from the United States, Canada, England, the
European Union, Australia, New Zealand and Singapore may apply. Based
partly on security concerns, those in developing countries such as
Kenya or Pakistan will not be allowed to apply.

India has ambitious plans to increase investments in India from
foreign sources by some $6 billion per year. An estimated 20 million
Indians live outside of India. The law states that non-citizens cannot
own property, among other things. So affluent ex-pats were unable to
build hospitals, schools or corporations in India to help improve
conditions and the economy. Now that can be done, and since the
Indians tend to have such strong cultural ties and allegiance to their
roots, it is likely that it will be done, and that the goal will be
met.

India to Allow Dual Citizenship 
 

Indians who seek a better life in the USA will no longer have to
forfeit allegiance to their own country if they plan to become
American citizens.
Currently, ethnic Indians living abroad have to forfeit their native
citizenship if they leave India to live and naturalize in another
country.

But recently, Prime Minister Atal Bihari Vajpayee made an announcement
that things will be changing. The details were outlined at a gathering
in the capital of New Dehli, where 1500 nonresident Indians, including
Nobel laureates, businesspeople and politicians, gathered.

India will be allowing dual citizenship for those of its people living
in the United States and several other affluent countries, in an
effort to spur  investments in Indian markets and put to rest a
longstanding irritation among ethnic Indians. Although they probably
won't be able to vote while living abroad, Indians will be able to
visit their homeland without visas now. Or guilt. Many have been
plagued by their decision to renounce their Indian citizenship when
all they really wanted to do was give their families a better life in
a much more economically sound country. It never meant they wanted to
give up their cultural backgrounds, ethnic identity or ties to their
native country.

Citizenship will be granted on a case-by-case basis. At the moment,
only ethnic Indians from the United States, Canada, England, the
European Union, Australia, New Zealand and Singapore may apply. Based
partly on security concerns, those in developing countries such as
Kenya or Pakistan will not be allowed to apply.

India has ambitious plans to increase investments in India from
foreign sources by some $6 billion per year. An estimated 20 million
Indians live outside of India. The law states that non-citizens cannot
own property, among other things. So affluent ex-pats were unable to
build hospitals, schools or corporations in India to help improve
conditions and the economy. Now that can be done, and since the
Indians tend to have such strong cultural ties and allegiance to their
roots, it is likely that it will be done, and that the goal will be
met.