India has relied mainly on Russian-built submarines until now
India's launch of a nuclear-powered submarine is a threat to regional peace and security, Pakistan has said.
"Pakistan will take appropriate steps to safeguard its security without entering an arms race," foreign office spokesman Abdul Basit said.
The submarine, unveiled at a ceremony on Sunday, will be able to launch missiles at targets 700km away.
At Sunday's launch, Prime Minister Manmohan Singh said India had no aggressive designs on anyone.
India has become only the sixth country in the world to build its own nuclear-powered submarine - until now only the US, Russia, France, Britain and China had the capability to do so.
But the move has prompted concern over the border.
"The continued induction of new lethal weapon systems by India is detrimental to regional peace and stability," Mr Basit said.
"Pakistan believes the maintenance of strategic balance is essential for peace and security in the region."
Pakistan navy spokesman, Captain Abid Majeed Butt, told Dawn News television that the launch of the submarine was a "destabilising step".
He said it would "jeopardise the security paradigm of the entire Indian Ocean region" - and warned of a possible nuclear arms race in the region.
At the launch ceremony Indian Prime Minister Manmohan Singh said it was necessary to keep pace with technological advancements worldwide.
He added that the sea was becoming increasingly relevant to India's security concerns.
The submarine was launched at a ceremony on Sunday
The 6,000 tonne Arihant submarine will only be deployed after a few years of trials. But it will be able to launch missiles at targets 700km (437 miles) away.
The BBC's Sanjoy Majumder in Delhi says until now India has been able to launch ballistic missiles only from the air and from land.
Nuclear submarines will add a third dimension to its defence capability.
When it is eventually deployed, the top-secret Arihant will be able to carry 100 sailors on board.
It will be able to stay under water for long periods and thereby increase its chances of remaining undetected.
By contrast, India's ageing conventional diesel-powered submarines need to constantly surface to recharge their batteries.
Our correspondent says the launching of the Arihant is a clear sign that India is looking to blunt the threat from China which has a major naval presence in the region.