Only if they are travelling.
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No, they do not.
Having a valid foreign passport (or having any passport at all) is not at all "mandatory" for the naturalization process. They can always apply for US passports as soon as they naturalize (and of course also renew their Indian passports, if they so wish..)
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No, if they are going to stay in the US all the time.
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I agree they will not need their passport renewed unless they plan to travel outside of the US.
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