The suggestion made in Gary Milhollin's article {"Asia's Nuclear Nightmare -- The German Connection," Outlook, June 10} that India has engaged in clandestine import of heavy water for its nuclear power plant is baseless. India is one of the few countries producing heavy water in substantial quantities. It has had six heavy water plants in operation for nearly a decade, and two more are coming up.

Mr. Milhollin's subsequent conclusion that India is using its unsafeguarded nuclear power reactors to produce fissile material for a nuclear weapon arsenal is even more untenable. The government of India has stated time and again at the highest level that it is against production and stockpiling of nuclear weapons, and it remains committed to peaceful uses of nuclear energy. Mr. Milhollin's visualization of the ''most likely scenario'' involving a preemptive strike by India against Pakistan and a subsequent nuclear conflict is in the realm of fiction and need not be commented upon. DAYAKAR RATAKONDA Press Counsellor, Embassy of India Washington

Steven Coll's interesting article about the Indian writer Upamanyu Chatterjee{Style, June 23} contains an odd error. I quote: ''Chatterjee bristles when he talks about expatriate Indian writers whose work he partially admires -- Salman Rushdie, V. S. Naipaul -- because he thinks they don't belong to India at all; the India that they write about is an India of memory, not of experience.''

I could respect Mr. Chatterjee's opinion more if he, or Mr. Coll, seemed to be at all aware that Mr. Naipaul, although of Indian extraction, was born and raised in Trinidad and has consistently written from the point of view of that circumstance. Indeed, he visited India for the first time after his stature as a writer had long been well established. Given these facts it is preposterous to assert that he writes of India (which he has done sparingly) from ''memory ... not experience.''

Mr. Chatterjee's remarks would have been less embarrassing to him had they been addressed to such a writer as Ved Mehta, who left India in his youth and makes his home in New York. I am sure there may be others, but neither V. S. Naipaul, nor his late brother, the novelist Shiva Naipaul, should be considered among them. JUDITH JUDSON Arlington