The international community was critical of India and Pakistan's nuclear tests in 1998 because-

It increased the vulnerability of the region to a nuclear exchange

The correct answer is Option (1) → It increased the vulnerability of the region to a nuclear exchange

"India has opposed the international treaties aimed at non-proliferation since they were selectively applicable to the non-nuclear powers and legitimised the monopoly of the five nuclear weapons powers. Thus, India opposed the indefinite extension of the NPT in 1995 and also refused to sign the Comprehensive Test Ban Treaty (CTBT). India conducted a series of nuclear tests in May 1998, demonstrating its capacity to use nuclear energy for military purposes. Pakistan soon followed, thereby increasing the vulnerability of the region to a nuclear exchange. The international community was extremely critical of the nuclear tests in the subcontinent and sanctions were imposed on both India and Pakistan, which were subsequently waived. India’s nuclear doctrine of credible minimum nuclear deterrence professes “no first use” and reiterates India’s commitment to global, verifiable and non-discriminatory nuclear disarmament leading to a nuclear weapons free world."