One can see by just looking at the india map , that if a nuke is dropped on them, only they will be the one who'll suffer. On the other hand, if Pakistan is nuked by India, the whole region including Iran,Afghanistan,China and even some western part of India will be affected, and in return lose their temper on India. India will have nothing to win over the war if they think of starting one with Pakistan. Everything to lose, nothing to gain.
Now that was geographically speaking. Coming to the economic factor, India will be the one suffering the most. Pakistan is not very big in their import and export whereas the whole world is trading with India. Hundreds and thousands of call centre are there of foreign countries. There are also other so many factors involved . Once the war starts, India will suffer like never before.
Win or lose from the nuke war, once the war is sparkled between the two countries there will only be blood everywhere. Nuclear bomb do not see the borders, nor do they see the religion/caste of people.
Ofcourse India will react to it if Pakistan make the first turn of using nuke, but India will need to think 10 times because they know they are the only Hindu state in the entire world. These two countries need to accept each other as the independent states , with their own culture, heritage, language, history and learn to respect each other. Its been ages since the two nations have gained their independence, why fight now when we know we cant unite as one country anymore?
India knows precisely the consequences of a nuclear war. This analysis was done at the time of Clinton presidency (I assume with US help). It is simple. In case of a first strike by Pakistan, 600 million Indians dead, 120 million Pakistanis dead, that included everyone you know in Pakistan and everyone I know in India. So go take the risk.