India's Special Forces have a checkered history, but they are getting better, particularly in the aftermath of the Mumbai terrorist attacks last year. Best of all, they already have a framework in place that makes conducting operations easier and with less bureaucratic red tape.
India has about four or five different special operations groups and, unlike the Pakistanis, each of these groups has a specific mission and are not single-mindedly tailored towards taking on the regular Pakistani Army. Para Commandos form the parachute infantry of the Army and the Special Protection group are assigned the task of executive protection for India's Prime Minister and VIPs from terrorist attacks. The elite MARCOS unit acts as India's Navy SEAL teams and performs special ops on the high seas. The primary counter-terror unit in the country, however, are the National Security Guards and the ones who have borne most of the responsibility for tackling India's persistent insurgent problems over the last couple of decades.
The Guards were formed in 1986, when escalating terrorist problems made the Indians realized they needed a single formation to deal with the problem, instead of a series of units whose missions and goals overlap. This is a situation that many countries with long-standing terrorist problems fall into. A good example is Russia, which maintains a series of individual formations, both military and police, to counter the threat from Chechen terrorists. In addition to Army Spetsnaz, Russia also maintains OMON, a police special ops group, and ALPHA, which is akin to the US Army's Delta forces. A lot of this is a legacy of the confusing and divided system of the old Soviet government, but it's something the Russians have yet to fix and streamline, and they're not the only country by a long shot to fall into this kind of complication.
The National Security Guards have a straightforward mission; taking on hijackers, dealing with general terrorist threats, bomb disposal, bomb investigation, and hostage rescue situations. The Guard are recruited from the police as opposed to the army, and fall under the authority of the Ministry of Home Affairs and the authority of the Civil Police. The Indians feel that it is a better idea and more practical for terrorist attacks, which they consider criminal activities as opposed to acts of war, to be handled by elite units operating under the law enforcement system. The general idea is that if army units are used, it makes it appear more as though as actual military conflict is being waged as opposed to neutralizing murderers.
The Guards are well-trained, at least by the standards of most nations in the region, Nicknamed the "Black Cats", the Guards are massive for an elite unit, mustering in at about 15,000 personnel. This seems excessive, especially in light of t he modern trend of having small compact armies with professional troops, but then the Indians argue that they are required to operate across a wide swath of territory, since India is a large nation (of over a billion people), and that the terrorist problem in the country is larger and more serious than in, say, Egypt or Israel. The troops are well-trained, equipped, and have a reasonably good track record of rescuing hostages and eradicating terrorists, but they're not perfect.
In 1988, the Black Cats conducted Operation Black Thunder against Sikh separatists in the Punjab who were using temples as bases. The operation was considered a major success and a boost to India's competency as a zero-tolerance nation. This is largely because, before the Cats were formed, India was struggling with a long-festered problem of Sikh terrorism and, in an attempt to wipe them out, launched Operation Blue Star. The operation was controversial, since the separatists were holed up inside a temple. The assault was carried out with heavy weapons (armored vehicles) in addition to lots of infantry. The fallout was an international disaster despite the operation's success, due to the heavy civilian casualties incurred during the assault (almost 500 civilian deaths.)
Since then, India has performed better and has incurred fewer civilian casualties during its operations against terrorists, but civilian deaths remain significant in major attacks against hostage takers and the Indians have not quite gotten up to par with first-class outfits such as the Israelis or the British SAS.