"I have lost inches around the waist but I still need to loose some weight"
If you've lost inches, you've lost fat mass, what is good. If you've lost fat mass and haven’t lost weight than you've gained muscle mass, what is also good.
Why do you believe you need to loose 'weight'? is it something you convinced yourself of, or did your doctor tell you to? If you are to fat, than you are on the right track, you're exchanging fat for muscle and your waist measurements combined with your stable weight are evidence of that.
If your doctor tells you to lose weight and he/she knows you started doing almost a full hour of exercise on average per day, he/she should know that your total body weight at this moment isn't a reliable indicator of how your fat percentage is doing. If he/she doesn't realise that and tells you to loose 'weight' rather than 'fat mass', than its time you look around for an other doctor who understands you can get leaner and healthier from doing exercise while not loosing or even actually gaining weight.
A controlled diet without sugars is always good, even if you weren’t a diabetes. Being a vegetarian kinda complicates things there though. The best diet for loosing fat, especially as you have type 2 diabetes is a low-carb diet. How strict a vegetarian are you? If you do eat fish, you may want to consider going for a low-carb or even a keto diet. If you don't eat fish, keto might be impossible and low-carb difficult, but I'm not quite sure there.