Type 2 Diabetes (T2D) is a complex disease with an elusive link between its molecular etiology and clinical presentation. Although, the role of visceral adipose tissue in the pathogenesis of insulin resistance and T2D is well known, only a limited information is available on the role of peripheral subcutaneous adipose tissue especiallyin Asian Indians. In this microarray based study of diabetic and normal glucose tolerant (NGT) Asian Indians, we generated the transcription profile of their thigh subcutaneous adipose tissue and further analyzed the diffrentially expressed genes (DEGs) using weighted gene co-expression network analysis (WGCNA) approach. Through WGCNA, we identified the perturbed pathways implicated by these DEGs in relevant co-expression modules by using a topology-based enrichment method. We also attempted to link these pathways with known aspects of T2D pathophysiology in terms of their association with some of their intermediate traits, namely; clinical diagnosis of diabetes, adipocyte size, HOMA-B, and HOMA-R, glycated hemoglobin (Hb1Ac), insulin, glocose level, proinflamatory markers - TNF-α, IL-6, lipid profile markers - Very Low Density Lipids (VLDL), Low Density Lipids (LDL), High Density Lipids (HDL), and Non Esterified Fatty Acids (NEFA). It was observed in this study that several modules of co-expressed genes show an association with diabetes and some of its intermediate phenotypic traits mentioned above. Therefore, these findings suggest a role of peripheral subcutaneous adipose tissue in the pathophsiology of T2D in Asian Indians. Additionally, our study indicated that the peripheral subcutaneous adipose tissue in diabetics shows pathologic changes characterized by adipocyte hypertrophy and upregulation of inflammation related pathways.