State of old character residing in British India (6)
I believe the answer is:
brunei
'state' is the definition.
(Asian country)
'old character residing in british india' is the wordplay.
'old character' becomes 'rune' (ancient symbol).
'residing in' is an insertion indicator.
'british' becomes 'b' (abbreviation e.g. in 'BBC').
'india' becomes 'i' (phonetic alphabet: alpha, bravo, charlie etc.).
'b'+'i'='bi'
'rune' put into 'bi' is 'BRUNEI'.
'of' acts as a link.
(Other definitions for brunei that I've seen before include "Southeast Asian sultanate" , "Rue bin in the sultanate" , "Sultanate in northwest Borneo" , "Ill" , "State on Borneo" .)