Background Plasma sialic acid is a marker of the acute phase response. Objective is to study the relationship between sialic acid relationship with metabolic variables in Indian type 2 diabetes with and without microvascular complications. Research design and Methods Fasting Venous blood samples were taken from 200 subjects of which 50 were of diabetes mellitus (DM) and nephropathy patients, 50 patients with type 2 diabetes and retinopathy, 50 patients with type 2 diabetes without any complications and 50 healthy individuals without diabetes. The Indian subject's aged 15–60 years with type 2 diabetes were recruited for the study. Simultaneously urine samples were also collected from each of the subjects. All the blood samples were analyzed for total cholesterol, triglyceride (TG), low-density lipoprotein (LDL), high-density lipoprotein (HDL), fasting and postprandial glucose on fully automated analyzer. Serum and urine sialic acid along with microalbumin levels were also estimated. Results There was a significantly increasing trend of plasma and urine sialic acid with severity of nephropathy (P < 0.001) and with degree of urinary albumin excretion (P < 0.001). Serum sialic acid correlated with increasing serum creatinine concentration (P < 0.001). Elevated serum sialic acid concentrations were also associated with several risk factors for diabetic vascular disease: diabetes duration, HbA1c, serum triglyceride and cholesterol concentrations, waist-to-hip ratio and hypertension. Significant correlations were found between sialic acid concentration and cardiovascular risk factors like LDL and TG in the diabetic subjects. Conclusion The main finding of this study is that elevated serum and urinary sialic acid and microalbumin concentrations were strongly related to the presence of microvascular complications like diabetic nephropathy and retinopathy and cardiovascular risk factors in Indian type 2 diabetic subjects. Further study of acute-phase response markers and mediators as indicators or predictors of diabetic microvascular complications is therefore justified.