South Asian vegetation provides essential ecosystem services to the 1.7 billion inhabitants living in the region. However, biodiversity and ecosystem services are threatened by climate and land-use change. Understanding and assessing how ecosystems respond to simultaneous increases in atmospheric CO2 and future climate change is of vital importance to avoid undesired ecosystem change. Failed reaction to increasing CO2 and climate change will likely have severe consequences for biodiversity and humankind. Here, we used the adaptive dynamic global vegetation model version 2 (aDGVM2) to simulate vegetation dynamics in South Asia under RCP4.5 and RCP8.5, and we explored how the presence or absence of CO2 fertilization influences vegetation responses to climate change. Simulated vegetation under both representative concentration pathways (RCPs) without CO2 fertilization effects showed a decrease in tree dominance and biomass, whereas simulations with CO2 fertilization showed an increase in biomass, canopy cover, and tree height and a decrease in biome-specific evapotranspiration by the end of the 21st century. The predicted changes in aboveground biomass and canopy cover triggered transition towards tree-dominated biomes. We found that savanna regions are at high risk of woody encroachment and transitioning into forest. We also found transitions of deciduous forest to evergreen forest in the mountain regions. Vegetation types using C3 photosynthetic pathway were not saturated at current CO2 concentrations, and the model simulated a strong CO2 fertilization effect with the rising CO2. Hence, vegetation in the region has the potential to remain a carbon sink. Projections showed that the bioclimatic envelopes of biomes need adjustments to account for shifts caused by climate change and elevated CO2. The results of our study help to understand the regional climate–vegetation interactions and can support the development of regional strategies to preserve ecosystem services and biodiversity under elevated CO2 and climate change.