How do you do it? Is there an event or do i need to capture a certain amount of territories?
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There is no "India" in world_names.csv, which means that in Vanilla, you will not be able to form India. The VIP mod contains British India, however.
"British India" was a creation of the Victoria Improvement Project (VIP) and you must have that mod installed in order to have it in the game. The reason for it was that, in early patch versions of the game, India gave the UK WAAAAAAYYYYY to much manpower while making social reforms virtually impossible because of the millions of Indians. The current version of the game only takes national pops into account so the problem is solved without having to create India as a UK satellite.
I also think that British India is supposed to model unoffical empire. British India was, I think, run by the East India company until around the 1850s. After that, UK took over administration fully as the East India company went bankrupt. I believe there may be events in VIP to allow the UK to take full control of British India if it appears to be 'failing', I think if it has been conquered beyond a certain amount.