Background: Inflammatory cytokine genes have been proposed as good candidate genes for conferring susceptibility to diabetic nephropathy. In the present study, we examined the combined effect of multiple alleles of pro inflammatory cytokine genes for determining the risk of nephropathy in type 2 diabetic patients. Methodology/Principal Findings: Eight single nucleotide polymorphisms (SNPs) of pro-inflammatory cytokine genes (CCL2, TGFB1, IL8, CCR5, and MMP9) were genotyped in two independently ascertained type 2 diabetic cohorts with (DN) and without nephropathy (DM); consisting of patients from North India (n = 495) and South India (n = 188). Genotyping was carried out using PCR, allele specific oligonucleotide-PCR (ASO-PCR), PCR-RFLP and TaqMan allelic discrimination assays and the gene-gene interaction among genetic variants were determined by multi dimensional reduction (MDR) software. Serum high sensitive CRP (hs-CRP) levels were measured by ELISA. The hs-CRP levels were significantly higher in DN as compared to the DM group (p<0.05). The CCL2, IL8, CCR5 and MMP9 polymorphisms were found to be associated with the risk of diabetic nephropathy. Frequency of CCL2 II, IL8 -251AA, CCR5 59029AA and MMP9 279Gln/Gln genotypes were significantly higher in DN than in DM group (p<0.05) and associated with an increased risk of nephropathy in both North and South Indian cohorts. CCR5 DD and IL8 -251AA genotypes were more prevalent in North Indian DN group only. The co-occurrence of risk associated genotypes (II, -2518GG (CCL2), DD (CCR5) and 279Gln/Gln (MMP9) conferred a tenfold increased risk of nephropathy among type 2 diabetics (p<0.0002). Conclusion: The present study highlights that common variants of inflammatory cytokine genes exert a modest effect on risk of DN and a combination of risk alleles confer a substantial increased risk of nephropathy in type 2 diabetes among Asian Indians.