The Indian military will go on high alert but won't immediately start a mobilization because a full-scale war is unlikely. However, India will deploy troops, armor and missiles closer to China, also try to obtain more intelligence on China through the US, France and Israel. Maintain contacts with the militaries of all neighboring countries and those having territorial conflicts with China.
The militaries of Taiwan, Vietnam and South Korea will go on elevated alert, to match the posture of the Chinese and North Korean militaries.
The newsmedia will pick this up quickly, and people all over India will start gathering in protest against the war. The Chinese public may be confused for a few days because their media will give only very limited coverage, and the purpose of declaring war won't be entirely clear. However, people in Hong Kong and millions of Chinese living abroad will start protests against war.
The stock markets and real estate in China and India will fall hard. USD and gold will gain on demand in Asia. Shares of defense suppliers from Europe, Taiwan, South Korea and Israel will gain (same for Japan's and US defense industry, but to a lesser degree). Real estate in the US and Australia will gradually become more expensive over many months (as big money moves away from Asia), possibly continuing an initial jump. Oil prices will fluctuate - first go up on uncertainty, then potentially fall back in two weeks when no major war unfolds but industries start slowing down nevertheless.
The US military will go on elevated alert in Japan, South Korea, the Persian Gulf, as well as in Guam and Diego Garcia - as the declaration of war can mask an attempted annexation of Taiwan or an attack on disputed islands in the South China sea. North Korea may be tempted to do something crazy. Satellites will watch nuclear silos more carefully in China, India and Pakistan. Reconnaissance planes will be flying a lot more often around China, Taiwan, North Korea, India, Pakistan. The US surface Navy will deploy to protect major shipping routes and discourage direct confrontations between the Indian and Chinese Navies. US submarines will deploy to the Taiwan strait, while one or two carrier strike groups will approach Taiwan from the East.
The UN Security Council will convene within days. Russia and the UK - demonstratively neutral - will lead the efforts to avert a war (but Russia may try to use the opportunity to sell more weapons to both sides, covertly). As a direct participant of the conflict, China will be ineligible to vote on relevant issues, so no veto power. The US and France will stay involved, but not forcefully, trying to figure out what's behind this and what leverage remains. For example, the US may threaten new weapons supplies to Taiwan. If any evidence is found that China was planning a sneak attack on Taiwan, the US may support Taiwan's declaration of independence.
In a week, it will be clear to everyone that it makes little sense for China to attack India (other than in isolated border skirmishes). The two countries are separated by enormous natural obstacles, don't have the ability to move a lot of troops and supplies abroad, but have a lot of weapons useful for defense, including active anti-ballistic defense programs. In other words, offensive operations won't accomplish much. Given the enormous damage caused to the economy with every day of a freshly declared war, China will either call it off quickly or clarify that it did not intend to start a full-scale war. In the meantime, cyber-warfare will intensify.
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