Background: People with type 2 diabetes (T2D) are at high risk of fragility fractures; however, there are no randomized controlled trials evaluating the efficacy of anti-osteoporosis drugs as a primary pre-specified endpoint in T2D. Objectives: To compare the efficacy of anti-osteoporotic drugs in postmenopausal women with T2D. Design: Prospective, randomized, open, blinded endpoint clinical pilot trial. Methods: Postmenopausal women (⩾50 years) with T2D (duration ⩾5 years), HbA1c 7–10%, eGFR ⩾45 mL/min/1.73 m2 and prior vertebral (clinical/morphometric), hip, radius, humeral fragility fracture or bone mineral density (BMD) T-score (adjusted for diabetes) at lumbar spine/femoral neck ⩽−2.5 and high FRAX score will be eligible for inclusion. Subjects with secondary causes of osteoporosis, prior exposure to bone-active therapies or history of use of glucocorticoids/pioglitazone/thiazides/canagliflozin will be excluded. Finally, eligible subjects will undergo estimation of serum calcium, phosphate, alkaline phosphatase, parathyroid hormone, 25-hydroxyvitamin D and bone turnover markers (BTMs) (total procollagen type I N-propeptide, β-CTX) along with trabecular bone score (TBS) and high-resolution peripheral quantitative computed tomography (HR-pQCT) of non-dominant hand and leg. After a 2-week run in phase, they will be randomized in a 1:1:1:1 ratio to receive yearly zoledronate, or biannually denosumab or daily teriparatide (in addition to standard of care, i.e., calcium 1000 mg/day and cholecalciferol 1000 IU/day) or only standard of care (control). The primary endpoints will be change in areal BMD and frequency of incident fractures at 18 months. The secondary endpoints will be change in HR-pQCT parameters, TBS and BTMs at 18 months. Adverse events will be recorded for all randomized participants. Ethics: The study has been approved by the Institute Ethics Committee. Written informed consent will be obtained from each participant. Discussion: The trial is expected to provide information regarding optimal anti-osteoporotic therapy in people with T2D and bone fragility. Registration: Prospectively registered in Clinical Trial Registry of India (CTRI/2022/02/039978).