The mechanisms driving glacial-interglacial changes in the climate of the Indo-Pacific warm pool are poorly understood. Here we address this question combining paleoclimate proxies with model simulations of Last Glacial Maximum climate. We find evidence of two mechanisms explaining key patterns of ocean cooling and rainfall change interpreted from proxy data. Exposure of the Sahul shelf excites a positive ocean-atmosphere feedback involving a stronger surface temperature gradient along the equatorial Indian Ocean and a weaker Walker circulation – a response explaining the drier/wetter dipole across the basin. Northern hemisphere cooling by ice sheet albedo drives a monsoonal retreat across Africa and the Arabian Peninsula – a response that triggers a weakening of the Indian monsoon via cooling of the Arabian Sea and associated reductions in moisture supply. These results demonstrate the importance of air-sea interactions in the Indian Ocean amplifying externally-forced climate changes over a large part of the tropics.