Introduction: During the early coronavirus disease (COVID-19) pandemic in 2020, researchers cautioned about the potential neuroinvasive capability of the virus and long-term neurological consequences. Although a few preliminary studies have found delayed communication, fine motor, and problem-solving skills in infants after COVID-19 infection, there continues to be a paucity of data on long-term development of neonates diagnosed with COVID-19. Methods: We conducted a prospective study of 20 neonates who acquired severe acute respiratory syndrome coronavirus-2 (SARS-CoV-2) infection during the first wave of the pandemic (April–July 2020). At 18–24 months corrected age, we assessed neurodevelopment by Bayley Scales of Infant and Toddler Development, the third edition (BSID-III), along with growth, hearing, and vision evaluation. Results: The mean corrected age at assessment was 21 months 11 days ± 1 month 28 days. We found developmental delay in nearly half of the children with scores below one standard deviation in either of the BSID-III domains. Mild delay in either motor, cognitive, or language domains was found in 9 (45%) children and moderate delay in 2 (10%). Expressive language, fine motor, and receptive language were predominantly affected. None of the children had hearing impairment, blindness, or significant growth faltering including clinically severe microcephaly. The mean composite cognitive, language, and motor scores were significantly lower in those with neurodevelopmental delay (p value – 0.02, 0.000, and 0.03, respectively) without any differences in their disease characteristics. Conclusion: Neonates infected with SARS-CoV-2 have an increased risk of developmental delays in expressive language, fine motor, and receptive language skills at 18–24 months of age. The severity of delays is predominantly mild.