ABSTRACTHIV exposed children are vulnerable to developmental delay irrespective of their HIV status due to combined effect of risk factors like poverty, prenatal drug exposure, stress and chronic illness in family and malnutrition. This cohort study assessed the development of 50 HIV exposed children aged 6–18 months at a Pediatric Centre of Excellence in HIV care in India. The development was assessed using Development Assessment Scale for Indian Infants (DASII) at enrolment, 3 and 6 months later. The development quotient (DQ) scores and proportion of children with developmental delay (DQ ≤ 70) were compared among two sub-groups, HIV infected (HI) and HIV exposed uninfected (HEU) children. The various social and clinical factors affecting development were studied by univariate and multivariate analysis. Prevalence of developmental delay was 2.4% in the HEU (n = 41), and 33.3% in HI (n = 9). The DQ of HI was significantly lower than that of HEU at all three assessments. The DQ of HI were also significantly lower compared to the HEU at ages 12.1–18 months (83.37 ± 20.73 vs 94.68 ± 5.13, p = 0.005) and 18.1–24 months (84.55 ± 15.35 vs 94.63 ± 5.86, p = 0.006) respectively. The development of HEU was adversely affected by lower socioeconomic status and presence of wasting. In addition, development of HI was also adversely influenced by presence of stunting and opportunistic infections, advanced disease stage and shorter ART duration. We conclude that with optimum care, HEU can have a normal development, while a considerable proportion of HI may continue to have delayed development.