Diabetes mellitus (DM) is a metabolic syndrome associated with chronic hyperglycemia, which results in various acute and chronic complications. DM leads to a state of chronic low-grade inflammation, which can have adverse effects on pulmonary functions. There have been contradictory studies related to the relationship between defects in lung functions in diabetic individuals and their correlation with glycemic control and systemic inflammatory markers. The present study aims to compare pulmonary function in controlled and uncontrolled diabetes in the Indian population while exploring the link between inflammatory markers and lung functions in diabetic patients. This observational, case-control study was conducted in the Department of Biochemistry at Sri Guru Ram Das Institute of Medical Sciences and Research in Amritsar, Punjab, on 116 subjects suffering from DM in the age group of 30-65 years. 58 diabetic patients with poor glycemic control [glycated hemoglobin (HbA1c)>7%] and 58 diabetic patients with good glycemic control served as controls (HbA1c≤7%). The duration of the study was two years. Blood samples of each patient were investigated for glycemic control, high-sensitivity C-reactive protein (hsCRP), and serum fibrinogen. Spirometry as a pulmonary function test was undertaken for all participants. The statistical analysis of good and poor glycemic control diabetics showed that the average duration of disease (in years) was 8±5 and 10.2±5.4, respectively. A significant positive correlation was found between inflammatory markers (hsCRP and fibrinogen) and HbA1c and fasting blood glucose. A substantial decline in forced vital capacity and normal values of forced expiratory volume in the first second was observed in poor glycemic control diabetics, depicting a restrictive pattern of lung disease. Lung damage is seen to be more prevalent in patients with a longer duration of disease and increased levels of inflammatory markers. Chronic inflammation due to DM can lead to fibrosis and destruction of lung tissue, resulting in the development of diabetic lung disease, which includes a decline in lung function, an increased risk of infection, and an increased risk of respiratory failure. Therefore, it is essential for individuals with DM to have regular pulmonary function tests and to manage their diabetes to minimize the impact on their lung health.