India is a federal state because there are governments at both the central and state levels. The Constitution makes the division of power between the centre and states explicit by specifying subjects over which the centre and states have jurisdiction.
However, India's federal system has a unitary bias. This is because
1. The Central government has the power to dismiss a state government if the state government is not functioning according to the Constitution.
2. The Central government in India has a lot more power than is the case with other federal systems like the USA.
3. All residual powers lie with the Central government.
4. For the subjects under the concurrent list, both the centre and states can make laws. However, if such laws clash, the central law will prevail.
5. The state governments depend upon the central government for financial support.