Obesity indicators are known to predict the presence of type 2 diabetes mellitus (T2DM); however, evidence for which indicator best identifies undiagnosed T2DM in the Indian population is still very limited. In the present study we examined the utility of different obesity indicators to identify the presence of undiagnosed T2DM and determined their appropriate cut point for each obesity measure. Individuals were recruited from the large-scale population-based Kerala Diabetes Prevention Program. Oral glucose tolerance tests was performed to diagnose T2DM. Receiver operating characteristic (ROC) curve analyses were used to compare the association of different obesity indicators with T2DM and to determine the optimal cut points for identifying T2DM. A total of 357 new cases of T2DM and 1352 individuals without diabetes were identified. The mean age of the study participants was 46⋅4 (sd 7⋅4) years and 62 % were men. Waist circumference (WC), waist:hip ratio (WHR), waist:height ratio (WHtR), BMI, body fat percentage and fat per square of height were found to be significantly higher (P < 0⋅001) among those with diabetes compared with individuals without diabetes. In addition, ROC for WHR (0⋅67; 95 % 0⋅59, 0⋅75), WHtR (0⋅66; 95 % 0⋅57, 0⋅75) and WC (0⋅64; 95 % 0⋅55, 0⋅73) were shown to better identify patients with T2DM. The proposed cut points with an optimal sensitivity and specificity for WHR, WHtR and WC were 0⋅96, 0⋅56 and 86 cm for men and 0⋅88, 0⋅54 and 83 cm for women, respectively. The present study has shown that WHR, WHtR and WC are better than other anthropometric measures for detecting T2DM in the Indian population. Their utility in clinical practice may better stratify at-risk patients in this population than BMI, which is widely used at present.