As per section 4 of the ACT, a company would be deemed to be a subsidiary of another if:
Indian Subsidiaries of foreign legal position, where such a body corporate floats a subsidiary India, the relation between such foreign parent and Indian company would be governed by section 4(6) and 47 of the act. section (6) of the act specifies that if a company is either a holding or a subsidiary company will also be a holding or subsidiary company. On other hands, section 4(7) of the act specifies that an Indian private company, being a subsidiary of a body corporate.
Such a body corporate would be considered a public company under the act and the entire share capital of such Indian private company is not held by a body corporate whether alone or along with other bodies corporate companies registered outside India. In addition to commercial considerations, these structures are largely influenced by the regulatory regimes across jurisdictions and are prepared with a view to taking advantage of the governing double taxation avoidance agreements.