The magnitude of type 2 diabetes mellitus (T2DM) is ever-increasing in India, and at present, ~77 million people live with diabetes. Studies have established that T2DM increases the risk of neurodegenerative disorders. This study aimed to determine the age-related prevalence of mild cognitive impairment (MCI) in T2DM patients in the Indian population and to identify link between cognitive dysfunction in T2DM patients and serum lipid composition through untargeted and targeted lipidomic studies. Using a cross-sectional study, we evaluated 1278 T2DM patients with Montreal cognitive assessment test (MoCA) and digit symbol substitution test (DSST) for cognitive functions. As per MoCA, the prevalences of MCI in T2DM patients in age groups below 40, 41-50, 51-60, 61-70, 71-80 and 81-90 years were 13.7, 20.5, 33.5, 43.7, 57.1 and 75% with DSST scores of 45.8, 41.7, 34.4, 30.5, 24.2 and 18.8% respectively. Binomial logistic regression analysis revealed serum HbA1c ≥ 7.51, duration of T2DM over 20 years, age above 41 years, and females were independent contributors for cognitive dysfunction in T2DM patients. Preliminary studies with untargeted lipidomics of the serum from 20 T2DM patients, including MCI and normal cognition (NC) group, identified a total of 646 lipids. Among the identified lipids, 33 lipids were significantly different between MCI and NC group, which comprised of triglycerides (TGs, 14), sphingolipids (SL, 11), and phosphatidylcholines (PC, 5). Importantly, 10 TGs and 3 PCs containing long-chain polyunsaturated fatty acids (PUFA) were lower, while 8 sphingolipids were increased in the MCI group. Since brain-derived sphingolipids are known to get enriched in the serum, we further quantified sphingolipids from the same 20 serum samples through targeted lipidomic analysis, which identified a total of 173 lipids. Quantitation revealed elevation of 3 species of ceramides, namely Cer (d18:1_24:1), Hex1Cer (d16:0_22:6), and Hex2Cer (d28:1) in the MCI group compared to the NC group of T2DM patients. Overall, this study demonstrated an age-related prevalence of MCI in T2DM patients and highlighted reduced levels of several species of PUFA containing TGs and PCs and increased levels of specific ceramides in T2DM patients exhibiting MCI. Large-scale lipidomic studies in future could help understand the cognitive dysfunction domain in T2DM patients, while studies with preclinical models are required to understand the functional significance of the identified lipids.