The influence of a warming‐induced reduction in Arctic sea ice extent (SIE) on the South Asian monsoon (SoAM) is not well understood. The mid‐Piacenzian Warm Period (MPWP, 3.264–3.025 million years ago, Ma), the most recent warm climate event when the Earth's CO2 levels were similar to the present, is considered an analog for future global warming. We present a multi‐proxy high‐resolution record of SoAM variability during the late Pliocene (∼3.4–2.7 Ma) using denitrification, productivity, weathering, and terrestrial influx proxies from the eastern Arabian Sea (International Ocean Discovery Program Expedition 355). The proxy‐based SoAM reconstruction is independently verified using a hybrid model‐proxy data set (Oscillayers). We identify two distinct intervals of monsoon intensification—during the MPWP and at 2.9 Ma. The SoAM variability appears to result from an interplay between dynamic (Insolation, Arctic SIE variability, and southern tropical Indian Ocean surface temperature variability due to Indonesian Throughflow changes) and thermodynamic effects (global temperature change due to pCO2 variability). Using a late Pliocene Arctic spring sea ice concentration reconstruction, we find that lower (higher) Arctic SIE leads to stronger (weaker) late Pliocene SoAM via asymmetric interhemispheric energy export and through modulating jet stream flow and meridional circulation. Our finding of strengthened SoAM during the MPWP corroborates model results and implies that more intense precipitation is expected over South Asia with continued climate warming.