Prior to 1 January 1949, Indians were British subjects under United Kingdom law. See British nationality law. Between 1 January 1949 and 25 January 1950, Indians remained British subjects without citizenship unless they had already acquired citizenship of the UK & Colonies or another Commonwealth country.
So you're right. There weren't millions of British subjects in India. There were hundreds of millions of them. However, they were still citizens of India and not Britain. They were, however, subjects of the monarch. Now, imagine British = Romulan. Not British = not Romulan. If Britain sudden;y disappeared then Indians would no longer be British subjects because that country no longer existed. The British citizens in Didia would still be British but would have no Empire to back them up.
I think that the novelverse isn't a huge, monolithic entity like some people think it is. There's a subset that has a shared continuity but even within that there's parts that contradict. There's also stand alone novels. If you had enforced your rules on everything fitting into a single continuity then we wouldn't have gotten Diane Duane's Rihannsu or Ford's The Final Reflection.