Though multiple studies link chromosomal regions 1q21-q23 and 20q13 with type 2 diabetes, fine mapping of these regions is yet to confirm gene(s) explaining the linkages. These candidate regions remain unexplored in Indians, which is a high-risk population for type 2 diabetes. Hypothesizing regulatory regions to have a more important role in complex disorders, we examined association of 207 common variants in proximal promoter and untranslated regions of genes on 1q21-23 and 20q13 with type 2 diabetes in 2115 North Indians. Further, top signals were replicated in an independent group of 2085 North Indians. Variants-rs11265455-SLAMF1 (odds ratios (OR)=1.32, P=1.1 × 10(-3)), rs1062827-F11R (OR=1.36, P=1.7 × 10(-3)) and rs12565932-F11R (OR=1.35, P=1.8 × 10(-3)) were top signals for association with type 2 diabetes whereas rs1333062-ITLN1 (OR=1.28, P=3.4 × 10(-3)) showed strongest association in body mass index-stratified analysis. Replication of these four variants confirmed associations of rs11265455-SLAMF1 (OR=1.27, P=9.1 × 10(-3)) and rs1333062-ITLN1 (OR=1.25, P=1.1 × 10(-3)) with type 2 diabetes. Meta-analysis further corroborated the association of rs11265455-SLAMF1 (OR random effect=1.29, P random effect=3.9 × 10(-5)) and rs1333062-ITLN1 (OR random effect=1.19, P random effect=1.8 × 10(-4)). In conclusion, the study demonstrates that variants of SLAMF1 and ITLN1, both implicated in inflammation, are associated with type 2 diabetes in Indians.