Acquired immunodeficiency syndrome (AIDS) is one of the most challenging infectious diseases to treat on a global scale. Understanding the mechanisms underlying the development of drug resistance is necessary for novel therapeutics. HIV subtype C is known to harbor mutations at critical positions of HIV aspartic protease compared to HIV subtype B, which affects the binding affinity. Recently, a novel double-insertion mutation at codon 38 (L38HL) was characterized in HIV subtype C protease, whose effects on the interaction with protease inhibitors are hitherto unknown. In this study, the potential of L38HL double-insertion in HIV subtype C protease to induce a drug resistance phenotype towards the protease inhibitor, Saquinavir (SQV), was probed using various computational techniques, such as molecular dynamics simulations, binding free energy calculations, local conformational changes and principal component analysis. The results indicate that the L38HL mutation exhibits an increase in flexibility at the hinge and flap regions with a decrease in the binding affinity of SQV in comparison with wild-type HIV protease C. Further, we observed a wide opening at the binding site in the L38HL variant due to an alteration in flap dynamics, leading to a decrease in interactions with the binding site of the mutant protease. It is supported by an altered direction of motion of flap residues in the L38HL variant compared with the wild-type. These results provide deep insights into understanding the potential drug resistance phenotype in infected individuals.