According to Portuguese law, Goans born before 1961 retained Portuguese citizenship after 1961 unless they officially renounced it.
What that actually means is that those born in Goa before 1961 are still Portuguese citizens even today according to Portuguese law. However, since the birth records were left in Goa after the brutal invasion by the Indian army in December 1961, the Portuguese authorities are not aware of the existence of these Portuguese citizens in that part of the world. The fact remains that they are indeed Portuguese citizens according to Portuguese law and full Portuguese/European citizenship rights are available to them if they wish to avail of those rights. In order to avail of those rights, you need to register your birth in Portugal.
So, this completely disregards what Indian law may say or claim about the subject.
It completely disregards the pressures from UK and other European countries in closing the doors to these Goans. You need to understand the difference.
Portugal is not granting Goans Portuguese citizenship. They are already Portuguese citizens by virtue of having been born in Estado da India Portuguesa or by virtue of being descendents of those born there.
Goans born before 1961 do not become naturalised citizens of Portugal because they always were Portuguese citizens and retained their Portuguese citizenship after 1961, according to Portuguese law. Even if they only register their birth in Portugal today, that act of registration of their birth in Portugal today is backdated to their date of birth as they are and will always be Portuguese citizens of origin and not naturalised Portuguese citizens.
Children of Portuguese citizens are also Portuguese citizens of origin and not naturalised Portuguese Citizens. Their citizenship is always backdated to their date of birth, even for all future generations!
Portuguese Goans are not naturalised Portuguese citizens. It is important to make the distinction.
You become a naturalised citizen of a country by virtue of living and working in a country for a number of years and then you apply for citizenship and can be granted naturalisation status and ultimately become a citizen of that country by naturalisation. You know that is not the case with Portuguese Goans.
Portuguese Goans are Portuguese citizens by virtue of jus solis, ie, because they or their ancestors were born in Portuguese Goa (Antigo Estado da India Portuguesa which was a Portuguese territory for more than 451 years, up to 1961).
British Goans are mostly naturalised British citizens and there is usually a date by which they acquired British citizenship (unless they were born in the UK). That is why the Indian authorities always ask you for your naturalisation certificate because they want to find out what is the date of the acquisition of foreign citizenship in order to be able to fine/penalise you monetarily from that date if you did not renounce Indian citizenship. That fine can go up to 625 UK pounds, at the moment and I personally know people who have been fined recently.
For Portuguese Goans, even for the second and third generations, they are Portuguese citizens of origin and not naturalised Portuguese citizens. The date of their Portuguese citizenship is always backdated to their date of birth (even for second and third and fourth, etc... generations) and that is why they can pass it to their children. If they were naturalised, they would not be able to easily pass it to their children, especially and particularly for the case of children that were born before the date of naturalisation of the parents and who were already more than 18 years old by that date.
So, indeed Goans who have Portuguese citizenship have a good argument to escape the fine/penalty if they claim that they are not naturalised Portuguese citizens but always had it since their birth. And this applies to all generations because the date of Portuguese citizenship is always backdated to the date of birth if you apply by virtue of being born in Goa before 1961 or by virtue of being a descendent of a Portuguese Goan born in Goa before 1961.
The question is whether the Indian authorities are willing to accept that interpretation or not...
There is definitely a conflict. Portuguese Nationality Law is in direct conflict with Indian Nationality law. Just like Portuguese nationality law is in direct conflict with Chinese nationality law (with regards to the Macau born before the Chinese-Portuguese agreement for the handover of Macau).
Plus, due to common ignorance in Goa, there is a loophole which is used by most Goans in Goa. Everyone in Goa thinks that it is OK to have a Portuguese BI (ID Card) as long as they do not have a Portuguese passport. Of course that is wrong. India does not allow dual nationality and the simple fact that you have a Portuguese BI is enough proof that you want to be recognised as a Portuguese national, therefore, you cannot also enjoy Indian nationality because Indian law does not allow dual nationality. If you are caught, you will face persecution and at least one day in prison. So, it is best to surrender Indian citizenship and get the OCI while you can and they still have not found out about your case... If you decide to renounce Indian citizenship much after you have a different citizenship, it is always best to renounce it outside India. If you do it in India, the minimum sentence is 1 day in prison and maximum I think it is 3 years. You have been warned but do not have nigh tmares. Life is short and it is not worth..