The South Asian security environment is defined by India-Pakistan relations. The history of two state‟s relations has been embroiled with skirmishes, conflict and wars. The asymmetry in size, economy, and conventional military capabilities of both states have resulted in their threat perception and security dilemma. However, the introduction of nuclear weapons into the South Asian strategic environment has brought an element of stability in the region owing to the nuclear deterrence. Nuclear deterrence has created a balance in overall power structure of the region. Therefore, if any aggressive development by one state disturbs the power balance, then rebalancing act has to be done by the other. Indian worldview is based on the regional hegemony through economic, military and industrial development. Although, nuclearization has brought an element of stability in terms of conflict escalation, yet the historical protracted conflicts have further complicated the security dimensions of the region. The nuclearization of South Asia presents a unique and dynamic equation of balance of power which is different from the Cold War definitions of it. Pakistan tries to balance Indian power while India is trying to balance China. However, balance of power is concentrated in the nuclear developments. So, South Asian nuclear balance of power merits the consideration of significance of nuclear weapons and their role in the strategic stability in the region. The external powers have played an important role to balance India-Pakistan power relationship. However, their role has been partial in resolving concerned issues between India and Pakistan. They have managed to serve their own interests. In the meanwhile, both India and Pakistan have benefitted from the role of external powers and the strategic environment has remained stable.