Theoretically Pakistan is poised to respond to Indian military retaliation for a terrorist strike with tactical nukes.
It’s debatable how much nuclear weapons add to national security. But what's undeniable is that they add layer upon layer of complexity, sprinkled with convoluted and even counterintuitive thinking (such as how missile defense systems are seen as an offensive act), to national defense. By way of example, on April 30, in the Times of India, Indrani Bagchi, wrote:
India will retaliate massively even if Pakistan uses tactical nuclear weapons against it. [It] will protect its security interests by retaliating to a “smaller” tactical attack in exactly the same manner as it would respond to a “big” strategic attack.
Two questions immediately arise.
1. Why did Pakistan develop tactical nuclear weapons?
2. Why would India respond disproportionately to the use of what’s often referred to as “battlefield” nuclear weapons? (Not to diminish their power or, by any means, condone a state’s possession of them.)
First, we’ll quote Ms. Bagchi, who quotes Shyam Saran, the convener of India’s National Security Advisory Board. Speaking for nuclear-weapons policymakers in New Delhi, Mr. Saran “placed India’s nuclear posture in perspective in the context of recent developments, notably the ‘jihadist edge’ that Pakistan’s nuclear weapons capability have acquired.” (No, jihadis haven’t – yet anyway – insinuated themselves inside Pakistan’s nuclear-weapons program.)
Answering question one, Saran said that Pakistan hopes (according to Indian policymakers), by developing tactical nuclear weapons,
“ … to dissuade India from contemplating conventional punitive retaliation to … cross-border terrorist strikes such as the horrific 26/11 attack on Mumbai. What Pakistan is signalling to India and to the world is that India should not contemplate retaliation even if there is another Mumbai because Pakistan has lowered the threshold of nuclear use to the theatre level. … This is nothing short of nuclear blackmail.”
You can see how nuclear weapons have the power to cloud men’s minds. Pakistan (if the Indian policymakers are correct) thinks that it can keep India from retaliating to yet another terrorist attack. With the same dearth of commonsense that Pakistan exhibits in the above passage (if true), India then declares that it won't just retaliate with tactical nukes, but with strategic nuclear weapons.
Never mind that the best way to keep India from retaliating is, obviously, to refrain from attacking. Of course, that beggars the question of whether Pakistan can keep its militants from attacking India (except for when it wants them, too).
Providing an answer to question two, Saran says (emphasis added):
“India will not be the first to use nuclear weapons, but if it is attacked with such weapons, it would engage in nuclear retaliation which will be massive and designed to inflict unacceptable damage on its adversary. The label on a nuclear weapon used for attacking India, strategic or tactical, is irrelevant from the Indian perspective.”
Re what’s emphasized: ever notice how often bravado and black humor intersect? To buttress his argument, Saran claims:
"A limited nuclear war is a contradiction in terms. Any nuclear exchange, once initiated, would swiftly and inexorably escalate to the strategic level."
In any event, another answer to question one may exist. Ms. Bagchi writes that Pakistan may – also? primarily? – have developed tactical nuclear weapons
… to keep its weapons from being confiscated or neutralized by the US, a fear that has grown in the Pakistani establishment in the wake of the operation against Osama bin Laden.
Western policymakers might be inclined to shoot down this line of thinking as a conspiracy theory. But, as historian Agha Humayun Amin, a former major in the Pakistani Tank Corps, writes in a recent ebook
The Pakistani military perception right from 2001 was that the USA was a threat for Pakistan's nuclear program and US arrival in Afghanistan had more to do with Pakistan and less with the Taliban. Therefore the Taliban had to be supported. As long as the Americans were busy with the Taliban, Pakistan or Pakistani nuclear assets were safe.

The importance of Central Asia tends to be under-estimated by most Western observers, particularly in the major print media and on TV. It was only the Western business world that understood the region’s significance promptly after the fall of the Soviet Union, when the
Attaining those objectives would clearly be difficult, if not impossible, given the very tangible physical and political barrier to Central Asia epitomized by Pakistan. There was one way out of this dilemma: reliance on a peaceful and stable Afghanistan as a bridge to Central Asia. But that, in turn, could be assured only if Afghanistan could function as it had in antiquity, when it was the central location of a highway system linking East and West. The famed Silk Road had enabled the transport of goods and people over nearly 7,000 miles, from the Han Chinese, through ancient Bactria -- now part of Afghanistan, to the vast Roman Empire. This ancient system of transport was also viewed as a symbol of “collective security and global peace” throughout these huge expanses. No less today than it was in olden times, commerce remains an anchor of peace and stability. Hence, the New Silk Route initiative, introduced at the United Nations in September 2011 by U.S. Secretary of State, Hillary Clinton, and Afghan Foreign Minister Zalmai Rassoul, envisaged the creation of modern highway and railroad networks as well as energy pipelines. Washington saw this as part of the transition program following the reduction of American and NATO forces in Afghanistan through 2014, when the nation’s security would be turned over to the Afghan government.