Obesity and type 2 diabetes are increasing in rural and urban regions of South Asia including India. Pattern of fat deposition in abdomen, ectopic fat deposition (liver, pancreas) and also low lean mass are contributory to early-onset insulin resistance, dysmetabolic state and diabetes in Asian Indians. These metabolic perturbations are further exacerbated by changing lifestyle, diet urbanization, and mechanization. Important dietary imbalances include increasing use of oils containing high amount of trans fatty acids and saturated fats (partially hydrogenated vegetable oil, palmolein oil) use of deep frying method and reheating of oils for cooking, high intake of saturated fats, sugar and refined carbohydrates, low intake of protein, fiber and increasing intake of processed foods. Although dietary intervention trials are few; the data show that improving quality of carbohydrates (more complex carbohydrates), improving fat quality (more monounsaturated fatty acids and omega 3 polyunsaturated fatty acids) and increasing protein intake could improve blood glucose, serum insulin, lipids, inflammatory markers and hepatic fat, but more studies are needed. Finally, regulatory framework must be tightened to impose taxes on sugar-sweetened beverages, oils such as palmolein, and dietary fats and limit trans fats.