Hepatitis C is a virus that infects liver cells. It can be transmitted through the sharing of needles by drug users, as well as through improperly done tattooing and body piercing. Infected blood and sexual contact can transmit the hepatitis C virus.
If you have hepatitis C you are at higher risk for type 2 diabetes. You will be more prone to insulin resistance, as glucose cannot be absorbed from the bloodstream and used efficiently. Excess glucose will become stored as fat, especially in the belly and in the liver.
Hepatitis C increases risk of liver cancer and cirrhosis of the liver, and promotes high levels of inflammation.
"Research has also shown that people with insulin resistance or diabetes have a poorer response to antiviral therapy than people without these conditions. Insulin resistance basically means having high blood insulin levels and higher than ideal blood sugar."
Dietary changes can help signicantly in reducing the risk of damage to your liver and can control your type 2 diabetes.
http://www.liverdoctor.com/index.php?page=hepatitis-c-and-diabetes