1. Dear Ramesh, your child would have been entitled to be registered as a British citizen if the child had been born in the UK. However, as your child was born in India, she does not qualify for registration as a UK citizen as you would have needed to have been a British citizen by descent, in accordance with section 3 of the British Nationality Act, 1981, in order that she acquire British citizenship. so, your daughter will have to live for five years continuous residence in the UK before she can get Indefinite leave to Remain and then one year later, she can apply for UK citizenship.
2. In this regards, ***** ***** you received from the NCS is correct. It is not possible to register foreign births as a British citizen unless the parent is a British citizen by descent themselves. Your child would have had to have been born in the UK to qualify immediately as a British citizen.
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4. She needs to have resided continuously for five years in the UK before she can apply for ILR. She cannot apply at this point in time, as she has only been in the UK for two years. Her right to apply for ILR does not accrue just because you are applying for it or have got ILR. She has to wait the five years residence.
5. You are welcome. Best wishes.