Abstract Background Economic dimensions of implementing quality improvement for diabetes care are understudied worldwide. We describe the economic evaluation protocol within a randomised controlled trial that tested a multi-component quality improvement (QI) strategy for individuals with poorly-controlled type 2 diabetes in South Asia. Methods/design This economic evaluation of the Centre for Cardiometabolic Risk Reduction in South Asia (CARRS) randomised trial involved 1146 people with poorly-controlled type 2 diabetes receiving care at 10 diverse diabetes clinics across India and Pakistan. The economic evaluation comprises both a within-trial cost-effectiveness analysis (mean 2.5 years follow up) and a microsimulation model-based cost-utility analysis (life-time horizon). Effectiveness measures include multiple risk factor control (achieving HbA1c