With the theme of opening up to each other, pragmatic cooperation, mutual benefit and harmonious development, the expo is expected to serve as a platform for economic, technological and cultural exchanges between China and South Asian countries.
The five-day expo is expected to attract more than 1,200 exhibitors and buyers from 43 countries or regions, according to organisers.
A 130 member strong Indian business delegation is taking part in the expo.
There are also two outdoor display zones for furniture, large machinery and equipment.
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Chinese Vice Premier Ma Kai and foreign leaders or senior officials from Malawi, Sri Lanka, Nepal, Laos, Vietnam, Malaysia and Thailand attended the opening ceremony.
The South Asian Association for Regional Cooperation Secretary-General Ahmed Saleem was also present.
The event has been upgraded from the South Asian Countries Commodities Fair which was first held in Kunming in 2010.
The 21st Kunming Import and Export Fair opened simultaneously with the expo.