Security and stability is first priority of foreign policy of any state in world. In the perspective of South Asia, states feel themselves insecure as well as instable because of inter-state and intra-state conflicts. These issues are of political, territorial as well as ideological kinds. In current regional environment, foreign states make various strategies to secure their own interests and among these strategies, alliance making is the most prominent. When different countries find some common objectives and interests they put common efforts to achieve those interests. In South Asia, US and Indian common objectives brought both of the states close to each other. Indian ambitions to acquire its status of regional power and US wishes to contain China to maintain its superior designs in world and especially in South Asia. Both India and US have a claim to be the champion of democracy in world and believe that they will go for any point for insurance of global democratic values. These kinds of common interests along with global war on terrorism brought both states closer to each other and US foreign policy for India resulted in Nuclear Deal between them. Which will not only cause disturbance for regional security environment but imbalance of power is also obvious in South Asia. US foreign policy tilt towards India will put severe impacts on the South Asian security. Pakistan and India are nuclear states in South Asia and always seem in continuous phase of enmity. Strategic as well as economic cooperation between two states will bring serious concerns not only for Pakistan but for security of whole South Asia. US foreign policy shift will tilt overall balance of power towards India and obvious results will be destruction, political and economic instability and aggravation in enmity rather than friendship. India and Pakistan are nuclear states and in case of any serious clash result will be the more devastating. The possession of sophisticated weapons like biological, chemical and physical nuclear weapons can be dangerous and devastating for South Asian security. Many political thinkers and scholars from South Asia have discussed fear of this nuclear flashpoint many times in their articles and research work. Terrorism, nuclear terrorism and nuclear deals are putting oil on fire in deteriorating the security structure and security architecture of South Asia. US is fighting against terrorists in Afghanistan along with NATO and its ally. The military forces of Pakistan are curbing the roots of terrorism in their home for domestic and regional peace and stability. On the other hand, India has no cordial relations with its neighbors which is an alarming situation for South Asian security. In these circumstances, US must opt balanced policies towards this region so that balance of power could not divert to any side. This will not only bring prosperity and peace in South Asia but it will also ensure that US is a real champion of democracy. It is high time to go forward and resolve disputes through peaceful means for regional security, stability, development and prosperity without using coercive means. World Leadership should take flexible and bold steps to settle their differences. These steps should be followed by composite dialogues, Confidence Building Measures (CBMs), Track II and Back-Channel diplomacy for peaceful conflict resolution & management.