Will I receive a higher baggage allowance on all sectors when I request for an upgrade?
When traveling on multiple flights, e.g. Singapore-Dubai-Bombay any upgrade redeemed for the origin flight (Singapore-Dubai) will entitle the passenger to a higher baggage allowance for that flight only. However, the higher baggage allowance will not be applicable for the onward flight (Dubai-Bombay). Any difference in the allowance must be charged (although the passenger may intend to upgrade himself on the onward flight, at Dubai).
http://www.skywards.com/Help_faq.aspx?SkinID=3
This has been my exact experience.
Theoretically in the above example you will only have to pay excess at DXB-BOM rates if you have 40kg.