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South Asian (SA) women have an 11 times higher risk of developing diabetes as compared to White British (WB) women. However little is known if they are at similar high risk of adverse neonatal outcomes.We undertook a retrospective, cross-sectional study of 320 women with pre-gestational and gestational diabetes delivering at University Hospitals of Leicester from Jan2009–Dec2010 to determine the influence SA ethnicity on neonatal morbidity and mortality as compared to WB neonates.Compared to WB, SA mothers were less obese (p < 0.005), had diet-controlled diabetes and delivered vaginally (p = 0.05). SA neonates were less likely to be large for gestational age OR(95% CI) 0.62(0.39–0.99) and preterm OR 0.59(0.31–1.13). 9.4% SA neonates developed hypoglycaemia compared to 17.4% in WB OR 0.49(0.24–1.01). Only 11.6% SA neonates were admitted to NICU as compared to 21.2% WB, OR 0.48(0.26–0.91). The most common reason for NICU admission in both the groups was sepsis OR for SA 0.55(0.28–1.09), followed by respiratory distress OR 0.43(0.19–0.98). There was no significant difference in lethal congenital anomaly, birth trauma or readmission rate in both groups. There were 4 stillbirths and 1 neonatal death in SA group but none in WB group.Despite higher risk of diabetes in SA mothers, their neonates had less morbidity and this can be attributed to lower rates of obesity and insulin requirement. However one rather worrying outcome is the higher stillbirths in SA group. The potential influence of maternal socio-economic status and education need to be explored to guide future counselling and interventions.