Diabetes per se does not cause rash, but the high sugar makes the skin more prone to infections, allergic reactions, and eczema and it can cause a particular infection or
eczema to persist. The
rash could be dermatitis, reaction to local lotions, powders etc, reaction to condom’s latex, a STD if there is a history of unprotected sex, fungal infection like tinea cruris, psoriasis, bacterial infection or eczema. It is difficult to comment beyond this without examining the rash.