Article 2 of CoI : Article 2: Admission or establishment of new States.

Explanation using Example

Example 1:

The Indian Parliament decides to admit a new territory, Lakshadweep, as a full-fledged state. After thorough discussions and considerations, Parliament passes a law specifying the terms and conditions for Lakshadweep's admission. These terms include the establishment of a state government, allocation of seats in the Lok Sabha and Rajya Sabha, and the distribution of financial resources. Once the law is enacted, Lakshadweep officially becomes a new state within the Union of India.

Example 2:

A region in the northeastern part of India, currently part of Assam, has been demanding statehood due to its unique cultural and ethnic identity. After evaluating the demands and the potential benefits, Parliament decides to establish a new state called Bodoland. Parliament passes a law outlining the terms and conditions for the creation of Bodoland, including the delineation of its boundaries, the establishment of a state legislative assembly, and the allocation of financial and administrative resources. With the enactment of this law, Bodoland is officially recognized as a new state in the Union of India.