Abnormalities in lipid metabolism have been linked to the development of obesity. We used a nutrigenetic approach to establish a link between lipids and obesity in Asian Indians, who are known to have a high prevalence of central obesity and dyslipidaemia. A sample of 497 Asian Indian individuals (260 with type 2 diabetes and 237 with normal glucose tolerance) (mean age: 44 ± 10 years) were randomly chosen from the Chennai Urban Rural Epidemiological Study (CURES). Dietary intake was assessed using a previously validated questionnaire. A genetic risk score (GRS) was constructed based on cholesteryl ester transfer protein (CETP) and lipoprotein lipase (LPL) genetic variants. There was a significant interaction between GRS and saturated fatty acid (SFA) intake on waist circumference (WC) (Pinteraction = 0.006). Individuals with a low SFA intake (≤23.2 g/day), despite carrying ≥2 risk alleles, had a smaller WC compared to individuals carrying <2 risk alleles (Beta = −0.01 cm; p = 0.03). For those individuals carrying ≥2 risk alleles, a high SFA intake (>23.2 g/day) was significantly associated with a larger WC than a low SFA intake (≤23.2 g/day) (Beta = 0.02 cm, p = 0.02). There were no significant interactions between GRS and other dietary factors on any of the measured outcomes. We conclude that a diet low in SFA might help reduce the genetic risk of central obesity confirmed by CETP and LPL genetic variants. Conversely, a high SFA diet increases the genetic risk of central obesity in Asian Indians.