Kiran Desai was awarded the Man Booker Prize for her book The Inheritance of Loss, the Booker prize committee announced on Tuesday.
The 35-year-old Desai beat five other authors, including favourite Sarah Waters and her book The Night Watch, for the £50,000 ($92,700 or €74,000) award.
She becomes the youngest ever female winner of the award, doing one better than her mother, Anita Desai, who was nominated for the award three times, most recently in 1999, but failed to win.
Desai's book was hailed by the judges as "a magnificent novel of humane breadth and wisdom, comic tenderness and powerful political acuteness".
Accepting her award, she praised her mother, to whom she said she owes "a debt so profound and so great that this book feels as much hers as it does mine."
"It was written in her company and in her witness and in her kindness.
"I really owe her this book so enormously, there isn't enough to convey it."
The chair of the panel of judges, Hermione Lee, said Anita Desai "would be proud" of her daughter: "The book is movingly strong in its humanity and I think that in the end is why it won."
The other four books in contention for the prize were Edward St Aubyn's Mother's Milk, MJ Hyland's Carry Me Down, Kate Grenville's The Secret River and Hisham Matar's In The Country of Men.
The Inheritance of Loss, Desai's second novel, tells parallel stories based in post-colonial India and the United States.
|Kiran Desai holds up her award-winning novel|
A Cambridge-educated Indian judge is living out a reclusive retirement in the foothills of the Himalayas, until his orphaned teenage granddaughter comes to stay with him, and his existence eventually comes under threat from Nepalese insurgents.
At the same time, his cook's son, who has moved to the United States to seek his fortune, is living a down-trodden life as an illegal immigrant in the restaurant kitchens of New York.
Desai lived in India until she was 15, when she moved to Britain.
She described the ordeal of writing the book as "seven, almost eight years of work, writing half stories, quarter stories ... I picked the novel out of it."
"It was quite a difficult, emotional experience for me."