National Interest: Accidentally, in history
First, Seymour Hersh claimed ("On the Nuclear Edge", The New Yorker, March 29, 1993) that Pakistan had indeed threatened to start that war with a nuclear attack against India and that threat had been conveyed to South Block by Bob Gates, then deputy national security advisor, who was the US president's emissary to the subcontinent. This was immediately denied. But a much more detailed description of those perilous days appeared in a subsequent book (Critical Mass: The Dangerous Race for Superweapons in a Fragmenting World, William E. Burrows and Robert Windrem, Simon & Schuster, 1994). Again, there were denials. But now they sounded thin.
The story, that Gates brought the warning to New Delhi, was never conclusively established. But at one point, many years later, after a great deal of cajoling and pleading, Gujral admitted to having had a curious conversation with his Pakistani counterpart Sahibzada Yakub Khan. Sahibzada had come to India ostensibly to defuse tensions. But he said, as they walked down the South Block corridor, "Gujral sahib, this will not be like any of the decent, clean wars we have fought in the past. Your rivers, mountains, cities, will all be on fire, a fire of the kind you cannot imagine, and on the first day itself." Gujral admitted he was taken aback. But he said he gathered his wits and replied: "Aisi baatein na karein toh achcha hai, Yakub sahib... kyunki humne bhi unheen daryaon ka paani piya hai jinka aapne..." The closest translation would be, keep these threats to yourself, because you will be paid back in kind.
I did persist with researching this over the years. That the Pakistanis threatened to begin the war with a nuclear attack is a fact. It is, truly, the first example of a nuclear blackmail. Did it work? That question is not fully answered yet. The one key witness who was most directly in the picture, Air Chief Marshal S.K. "Polly" Mehra, was the most forthcoming. He confirmed the threat and recounted how he was called by V.P. Singh and nervously asked, in front of Gujral, if he could prevent a Pakistani plane from delivering that "bomb". Mehra said no air force could guarantee that. He could reasonably make sure, though, that the intruder wouldn't go back. But, if such a thing happened, we need to retaliate, he said, and then asked an important question: "If the IAF has to deliver something in retaliation, can we at least see what it looks like? We can then figure out on which platform to put it, and how to deliver it. What are its aerodynamics, and so on." Mehra said while this conversation was on, he saw Gujral in some sort of a panic, almost sprinting in and out of the room carrying fresh sheets of paper, obviously cables of some kind, and showing them to V.P. Singh. This much I was able to confirm with V.P. Singh himself, on the record. The implicit, and shocking story is, that if India did have a credible, deliverable deterrent then, its armed forces had not even seen it. More likely, India did not. We can say with certainty that this is when India finally dropped all notions of nuclear ambiguity and embarked on full-fledged weaponisation. Whether the Pakistani nuclear blackmail then worked, whether it intimidated V.P. Singh's truly weak government, and if so, into what, is what we do not yet know. It is one of the most important questions Gujral has left unanswered.