In USA, the apportionment of seats is based on the census taken (based on the population of each the states). The USA Census Bureau uses an algorithm called Huntington-Hill method for apportioning. Watch the following video which explains it :
The algorithm is pretty simple and you have a look at it here. I ran this algorithm on the India Census data collected in 2001. I got the present distribution of Lok Sabha seats across states from wikipedia. The following table shows the distribution of seats based on the Algorithm(2nd column) and the 3rd column shows the present scheme of apportionment. The last(and colored) column displays the difference.
I am not sure how the present Indian apportionment process works, but looks like we are not way off from the USA's apportionment process.
Do you know how United Kingdom(UK) computes the apportionment? It would be fun to compare, as India was ruled by East India Company and we can know the correlation between the Indian, American and the British way of apportionment of seats.