An Indian agent of R&AW, Hashum Qureshi in Srinagar was working in league with the BSF. In Pakistan Occupied Kashmir, a Pakistan sponsored terrorist organization, launched the Al-Fatah organization for liberation from J&K from India. 36 of these members were arrested by J&K Police with the help of Indian Intelligence Agencies. In order to get more inside information, R&AW decided to infiltrate Qureshi into this organization as he had knowledge of the terrain of POK.
But he changed his integrity when he was sent to POK and was won over by the Pakistani Intelligence, the ISI. He was given training to hijack a plane by a former Pakistani pilot. When he was sent to India back the BSF arrested him and he spilled the beans upon interrogation. What was his plan?
The plan was to hijack plane which would be piloted by Rajiv Gandhi, son of Mrs. Indira Gandhi then Prime Minister of India. When this startling disclosure was reported to the head of the head of BSF and R&AW, India decided to beat Pakistan at it’s own game and yes, we won!
R&AW and BSF persuaded Qureshi to work for them in order to save him from execution by Indian Authorities. Plan was Qureshi would hijack an Indian Airlines aircraft flying from Srinagar to Lahore and where he would demand the release of 36 members of the Al-Fatah who were in jail in India in lieu of the passengers on the plane.
A Fokker Friendship aircraft, Ganga of the Indian Airlines which was retired already from Indian Airlines was inducted for this operation. The plane was hijacked and he was allowed a toy pistol and a fake grenade inside the plane. Pakistani authorities at Lahore allowed the plane to land when there were informed that it had been hijacked by National Liberation Front of POK. All India Radio soon made the broadcast of this hijacking.
The whole world was informed that the Pakistani Government was behind this hijacking. Later he demanded (As Planned) release of 36 Al-Fatah members in the custody of India to which India declined. Qureshi was given political asylum and hailed him as a Freedom Fighter in Pakistan. He spoke to Zulfikar Ali Bhutto. Later the passengers of the plane came by road to India and the plane was burned by Pakistan.
Why did India execute this operation? Indian government banned all the flights of Pakistan flying over our territory and it exposed that Pakistani state openly and actively supported terrorists. The truth was known to Pakistan that they were agents of the Indian Government.
Pakistan was trying to curb the civil unrest in East Pakistan by using civil flights to send resources. The shortest air route between east and west Pakistan was through Indian Air Space. Any other air route without using India air space was at least 3 times long and triple time/fuel consuming as shown by the above image. Pakistan had to go around India, via Sri Lanka. The hijacking greatly slowed down the arrival of Pakistani Army through Air Route. This was a master stroke of R&AW during the 1971 war for liberation of Bangladesh by India.
Source: Taken from a Write Up on R&AW from Quora