Share premium in foreign subsidiary tax implications

Guys.

I asked a question yesterday regarding tax liability on an Indian holding company putting money as share premium in foreign subsidiary. It is like that-

An Indian parent company has a foreign subsidiary with 100% shareholding. Parent had extended some loans to the subsidiary which will now be converted to the equity. But the parent company is reluctant to convert the accrued interest into share premium on the pretext that such conversion will be taxable in India. Please advise if this is the case.

Your feedback will be highly appreciated.

Thanks

Vic