The announcement of Saturday's test at the Sohae satellite launch site came just hours after US President Donald Trump said he would be "surprised" by any hostile action from the North.
Prime Minister Narendra Modi has said while SAARC has made progress, greater collaboration needed to act against the scourge of terrorism.
In a message on the 35th SAARC charter day, PM Modi said, "SAARC has made progress but more needs to be done. Our efforts for greater collaboration have repeatedly been challenged with threats and act of terrorism".
Highlighting how terrorism "impedes our shared objective of realizing the full potential of SAARC", PM Modi said, "it is critical that all countries in the region take effective steps to defeat the scourge of terrorism" and the "forces that support it" which will "generate greater trust and confidence to build a stronger SAARC".
The prime minister in the letter said the organisation was set up "to build a connected and integrated South Asia" and aims to promote "development and progress of all countries in the region" and New Delhi will continue to "support various initiatives to achieve closer cooperation in diverse areas"
The 19th SAARC summit was to happen in Islamabad in 2016 but it was boycotted by India along with --Bangladesh, Bhutan, Sri Lanka, Afghanistan after the Uri terror attack in Jammu and Kashmir.
Founded in Dhaka, SAARC, even though comprises just 3 per cent of the world area, it includes 21 per cent of the world population.
After 2016, New Delhi is focusing more on the BIMSTEC grouping as part of its "Act East" policy and had invited the leaders of the grouping during the swearing-in ceremony of PM Modi for his second term.