Realist scholars pay attention to the concept of power and balance of power since centuries. Despite having economic and military power, states acquire nuclear weapons, which leads to nuclear deterrence. In South Asia, where it is fluctuating and disturbed four times but since 1999, it is stable due to nuclear factor. Besides other factors, major contributing factor for disturbed balance of power is the Kashmir issue. Due to the persistency of conflict, the region experienced wars, which disturbed patterns of balance of power. Afghanistan factor and major powers presence will ultimately affect regional peace and stability. But prospects of future warfare at any time are not out of question. It will depend on the success and failure of deterrence and the role of extra regional powers. Despite economic and strategic interdependence, Pakistan and India have security dilemma of each other which has been a motivating factor for their nuclear programs. Besides this, Pakistan-China close military and nuclear cooperation and US-India military cooperation especially after Indo-US nuclear deal of 2006, failure of CBMs both bilateral and multilateral, and Indian ambitions to become major regional power and to seek UNSC and NSG membership are other disturbing factors for stable deterrence. Kashmir is such conflict which started on the basis of denial of human needs like security, identity, recognition and personal development. Kashmir issue an enduring rivalry between two states has become more complicated due to the involvement of non state actors means it is international issue especially after involvement of extra regional powers. Pakistan-China military collaboration, US tilt towards India, nuclear factor and water issue are major hindrances in resolving it. Afghanistan has provided space for outside interventions due to its geostrategic location and ethnic divide. 9/11 incident brought it in the policy framework of US. Taliban factor and rise of Islamic fundamentalism are major factors for US greater engagement in Afghanistan. But Pakistan-Afghanistan’s diverging relations are equally disturbing element for regional stability. India is more involved in improving its image through diplomacy and infrastructure development in Afghanistan. China is also interested in stabilized Afghanistan because of uprisings in Xinjiang province. NATO and UN are to some extent successful in peace keeping in Afghanistan but EU role is less effective. Concept of security has transformed after the rise of non state actors. In realist perspective, security of South Asian major states-Pakistan and India is based on their threat perception of each other. Having experienced of offensive realism four times, now these states are experiencing defensive realism since 1999. Balance of power depends on their offensive and defensive nature of warfare. Although, balance of power concept is not applied to non state actors due to non state entity. Regional balance of power can be analyzed in terms of Regional Security Complex Theory. Geographical proximity of states effects state security more than states in other regions. Therefore, Pakistan is more affected by Indian security policies and vice versa rather than security policies of states outside the region. Afghanistan is important in this complex as a buffer state. Regional Complex can be disturbed due to internal transformation and external transformation. Internally, patterns of amity and enmity are important. In Pakistan-India case, despite their enmity due to their strategic interdependency, they are bound in this system. Externally, extra regional powers influenced this complex. At regional pattern of enmity due to Pakistan-India rivalry is major challenge. At global level, Afghanistan factor, rise of Islamic fundamentalism, rise of India, US- China economic rivalry are some of the challenges. Three types of terrorist organizations are posing challenge to South Asia. These are interest based, state sponsored and area claimed like Al Qaeda, ISIS and ISIL. Nuclear terrorism has become major concern due to rise of terrorist organizations and fear of possession of nuclear weapons by them from any source. South Asian hostile relationship model provides favourable environment for nuclear terrorism. There are prospects of nuclear terrorism in South Asia due to Pakistan-India rivalry, shifting nuclear postures of both states, role of US and its fluctuating relations with Pakistan and ultimate tilt towards India, China’s role in South Asia, Pakistan-India-China and US threat perception of each other. In South Asia, China’s support to Pakistan in military and nuclear fields and its rivalry with India on Indian Ocean, tilted US policy towards India in same context. The persistent involvement of major powers like Britain, Russia, US or China due to Kashmir issue and Afghanistan factor have disturbed balance of power. Phenomenon of stable nuclear deterrence is challenged by rise of terrorist organizations and is affecting regional peace and security. Moreover, alliance patterns of US-India and China and Pakistan are more disturbing. In such situation, human security is ignored and even it is not prime agenda of states. South Asian peace and security depends on US effective role to bring Pakistan and India to nuclear policies. Kashmir can only be resolved, if proper mechanism will be provided and with inclusion of Kashmiri’s voice. Border management between Pakistan and Afghanistan which was not paid much attention should be given priority. Due to nontraditional threats (terrorist organization) peace and stability of the region is threatening. In this regard having realized the sensitivity of the issue, Pakistan and India should adopt a common agenda.