Observed and projected changes in potential evapotranspiration (PET) and drought are not well con-strained in South Asia. Using five PET estimates [Thornthwaite (PET-TH), Hargreaves–Samani (PET-HS), Penman–Monteith (PET-PM), modified Penman–Monteith (PET-MPM) and energy (PET-EN)] for the observed (1979–2018, from ERA5) and future warming climate, we show that significant warming has occurred in South Asia during 1979–2018. PET changes show considerable uncertainty depending on the method used. For instance, PET-TH has increased significantly while all the other four methods show a decline in PET in the majority of South Asia during the observed period of 1979–2018. The increase in PET-TH is substantially higher than PET-HS, PET-PM and PET-MPM due to a higher (3–4 times) sensitivity of PET-TH to warming during the observed period. Under the 1.58, 2.08 and 2.58C warming worlds, global climate models from phase 5 of the Coupled Model Intercomparison Project (CMIP5 GCMs) project in-creases in PET and drought frequency over the majority of the regions. Drought estimates based on PET-EN and PET-MPM are consistent with soil moisture–based drought estimates and project a substantial increase in the frequency of severe droughts under warming climate in South Asia. In addition, the projected frequency of severe drought based on PET-TH, which is an outlier, is about 5 times higher than PET-EN and PET-MPM. Methods to estimate PET contribute the most in the overall uncertainty of PET and drought projections in South Asia, primarily due to PET-TH. Drought estimates based on PET-TH are not reliable for the observed and projected future climate. Therefore, future drought projections should be either based on PET-EN/PET-MPM or soil moisture.