Type 2 diabetes (T2DM) is characterised by chronic hyperglycaemia due to abnormal insulin secretion and/or utilisation. Currently, sarcopenia has emerged as a new complication of T2DM, which increases the risk of physical disability, and even death. The study aims to estimate the prevalence of sarcopenia and sarcopenic obesity (SO) as well as their association with various other factors related to T2DM. The study was an observational hospital-based cross-sectional study conducted among diabetic patients who came to the non-communicable diseases (NCD) clinic of a tertiary care hospital in Gujarat, India, from April 2023 to June 2023. Adult patients with T2DM attending follow-ups were included, with a diagnosis of T2DM for at least 1 year from the date of their electronic medical records, regardless of their mode of therapeutic treatment. They were on regular medical reviews with two or more visits to the study site in the past 1 year. Then a self-structured standard questionnaire was used to collect the data, containing socio-demographic characteristics, clinical profiles, anthropometric assessment (comprising weight, height and body mass index [BMI]), bio-impedance indices like body fat%, skeletal muscle% and handgrip by hand dynamometer. In the study, a total of 404 participants participated. Their mean age was 55 ± 13.5 years and their mean body fat (BF) % was 30 ± 7.4%. BF%-defined obesity was found in 260 (64.4%) participants. A total of 362 (89.6%) had possible sarcopenia, 183 (45.3%) had sarcopenia and 124 (30.7%) had SO. Age (OR: 2.6, CI: 1.7-3.9), duration of diabetes for more than 7 years (OR: 7.5, CI: 3.65-15.4) and BF%-defined obesity (OR: 2.2, CI: 3.6-15) were statistically associated with Sarcopenia, in similar pattern age (OR: 2.4, CI: 1.5-3.7), and duration of diabetes more than 7 years (OR: 18.9, CI: 5.7-62) were associated with SO (P < 0.05). Older age, longer diabetes duration and BF%-defined obesity are associated with an increased likelihood of developing sarcopenia and sarcopenic obesity. Healthcare providers should prioritise regular screening for sarcopenia and SO in elderly individuals with diabetes to facilitate early detection and intervention.