I thought India did test a boosted fission weapon in 1998. Also, you can still theoretically miniaturize an implosion ball-shaped warhead to 500kg level, except you might then have a relatively small (but dirty, especially ground burst) yield. You can also put a layer of cobalt around such warhead to enhance radiation; thus, increasing lethality and deterrence.
1. India claimed that they have tested a boosted fission weapon. However, the yield of said weapon is only 56 kt. India claimed that the thermotical yield of their design is 200 kt. Yet keep in mind that the first Soviet boosted fission weapon has a yield of 400 kt (
RDS-6). Thus, I am personally doubtful about India's claims. Regardless, boosted fission weapons are still big and heavy.
2. Mk-12 has a yield of 14 kt. A ground bursting 14 kt bomb has a 1 psi blast radius of 2.84 km. You will need dozens of bombs to destroy one single city. A single Agni-V has a payload of 1,500 kg, so you will need at least 20 missiles to even threaten larger cities such as Shanghai. In that case, India currently does not have enough missiles for threatening more than one city.
3. MIRV requires testing as well. A good RV is light and reliable. India maybe able to produce MIRVs, but the weight of the RVs will be significantly higher than their Chinese counterparts. This means that the number of warheads that one missile can carry is actually even lower.
4. Even if Cobalt bombs are used (which do not live up to the hype btw), India can only hope to contaminate one major city with all its warheads and delivery systems. This will not be enough to knock China out of the war. Not even close. Also, the British tested a cobalt bomb in 1957 and found that Co-59's neutron absorption ability was much lower than predicted, resulting in a very limited formation of Co-60 isotope in practice. So it is actually possible for one to decontaminate an area polluted by cobalt bombs.