Not sure about India, but in other countries this "automatic revocation" is neither automatic nor permanent (believe it or not)
Also, given it is not a requirement by the US that the recipient give up their other citizenships, they don't care about the other country knowing about it
I guess that one could ignore this and keep on using their Indian passport - but doing so would be fraud and criminal misrepresentation.
WARNING
If holder acquires Nationality
of another country, he should
Surrender This Passport
forthwith to the nearest Indian
Mission/Post Abroad. Un-
authorized possession of this
Document shall Constitute an
Offence Punishable under
the Indian Passport Act 1967Not had this experience to comment on this first hand.
But as an Indian, I guess they ask you to surrender your Passport at the Indian embassy, and then ask you to apply for a PIO(Person of Indian origin) card.
On the other hand, I think, putting your US citizenship on risk for maintaining a illegal status would not make sense for a lot of people.
There are heavy fines for not self surrendering the indian passport after US Citizenship within 6 months.