Objectives: The European Union (EU) has been one of the leading aid donors to South Asia, especially post-9/11 increased its engagement in the region, where security became a major concern. After the 1990s, South Asia experienced major events, especially given the threat posed by non-state actors such as terrorism, religious extremism, and insurgencies. The study aims to explore the changing development cooperation of the EU with South Asia in the context of regional stability and counter-terrorism. The central focus of this study is to provide a background of EU development policy and its changing priorities and attitude towards the South Asia region. What changes in policy are necessary, and how have the 9/11 attack in the United States and non-traditional security threats influenced and changed its overall South Asia strategy? How has Afghanistan become crucial for the EU’s engagement in the region? Material and methods: The empirical study is the main framework of the study, and it is based on observation and measured phenomena by analysing the primary and secondary sources. Results: The changing world, from stability to re-engaging in conflicts, pandemics, and the rise of populism, is making the EU’s engagement in South Asia so complex. Conclusions: On the other hand, the Indo-Pacific regions and spreading dominance also make the effectiveness of the EU’s development diplomacy worrisome.