Step 1: Recall the common names of important nitrates.
Many nitrate salts are known by special common names.
\[
KNO_3
\]
is commonly known as
Potassium nitrate
and is traditionally called
Indian saltpetre
Step 2: Analyze the other options.
\[
NaNO_3
\]
is known as
Sodium nitrate
or
Chile saltpetre
and not Indian saltpetre.
\[
CsNO_3
\]
is cesium nitrate and has no common name as Indian saltpetre.
\[
Mg(NO_3)_2
\]
is magnesium nitrate and is not called saltpetre.
Step 3: Identify the correct compound.
Therefore,
\[
\text{Indian saltpetre} = KNO_3
\]
Step 4: Final conclusion.
Hence, the correct answer is
\[
\boxed{KNO_3}
\]
Therefore, the correct option is
\[
\boxed{(2)}
\]