I am looking for jqGrid option that can hide ‘Search’ and ‘Update’ buttons of subgrid. (Marked in red circle)

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I suppose you use subgrid as grid feature of jqGrid. See on the demo example under “Advanced”/”Subgrid as Grid”.
Inside of
subGridRowExpandedyou create explicitly new grid (as subgrid) and can optionally create navigator buttons with the line likeSo you should just remove the line or add additional options
search: falseandrefresh: false.