Desai, 35, is the youngest female winner of the $100,000 (Rs 50 lakhs) prize. The judges hailed the novel as 'a magnificent novel of humane breadth and wisdom, comic tenderness and power.' She dedicated the book to her mother, the novelist Anita Desai, who was shortlisted thrice for the prize.
Hermione Lee, chairwoman of the judges, told the BBC, 'I think her mother would be proud. It is clear to those of us who have read Anita Desai that Kiran Desai has learned from her mother's work. Both write not just about India but about Indian communities in the world.'
'The remarkable thing about Kiran Desai is that she is aware of her Anglo-Indian inheritance -- of Naipaul and Narayan and Rushdie -- but she does something pioneering,' Lee continued, 'She seems to jump on from those traditions and create something which is absolutely of its own.'
'What does it mean to be an immigrant'
'The book is movingly strong in its humanity and I think that in the end is why it won.'
Arundhati Roy (1997) and Salman Rushdie (1981) have also won the Booker Prize. Desai recently recalled her financial suffering when she worked on the novel, written over a period of seven years.
"I don't even have health insurance. And I hate to depend on anyone," said the writer who has a modest home in Brooklyn, New York.
'Human warmth is such an innate part of India'
"I have always been a frugal person but even I could not imagine how little I was living on while writing the book."
Many publishers were reluctant to sign her on for her second book because it was far removed from her first, an enjoyable parable called Hullabaloo in the Guava Orchard. Rushdie was among the first major writers to welcome the book, predicting a writer of uncommon style and substance had made her debut.
And yet selling the second book was a nightmare. 'It was just fighting, fighting, fighting -- waiting for six months for an editor to respond,' she said in an interview with The Globe and Mail.
Her dark but compellingly readable novel had also angered some readers. 'Some people were angry at the stories of the underside of globalisation and colonial hangovers that I had told in the book,' she said.
'But slowly I also began to hear from readers, especially those from India, that they found the book moving and that it had also made them think of the immigrant experiences and related topics.'
'Writing is like the draw of the ocean'
The book, published by the medium sized publisher Glove Atlantic in America, is a bestseller in paperback in many American cities. It was released just a few months ago in the United Kingdom. Earlier Desai had surged past fancied runners like David Mitchell, Peter Carey and Barry Unsworth. The long list of nominees included Nobel Laureate Nadine Gordimer.
The prize, formerly known as the Booker, is open to writers from Britain, Ireland and the Commonwealth of former British colonies. Founded in 1969, it was renamed when the financial services conglomerate Man Group PLC began sponsoring it four years ago. Desai, a critic of globalisation and multinationals, had said despite her reservations, she would still accept the prize.
Her book is also a story of commitments and betrayal, search of identity and an effort by some of its characters to come in terms with the tragedies caused by globalisation. It is also a novel about American immigrant experience and the aftermath of colonialism in India.
Awards were never on her mind, Desai had said a few days before the Booker win.
"I have been so busy writing this book and revising it that I never thought it would go for any award," Desai said. And when it received rave reviews, especially from the likes of The New York Times and the Chicago Tribune, she said she was reminded of what her mother had told her not too long ago: 'Nominations and awards come and go. But more important is to concentrate on one's craft and make an honest job out of it.'
Desai has travelled extensively in North America and the United Kingdom to promote her book. She was also at the book festival in Frankfurt last week.
While she is not sure what her next novel would be, she says she is not going to take seven years to complete her next book.
"My life is utterly, utterly incomplete when I do not think of writing," she says. As for the awards and ovations, she said recently, " Writers who get a lot of praise and have a huge amount of success and live so much in the public eye -- I don't know how they can write, because writing is a completely different thing. It comes from underground."
To buy Hullabaloo in the Guava Orchard or The Inheritance of Loss right here online click on either title.
What the Booker Jury said
'What does it mean to be an immigrant?'
'Human warmth is such an innate part of India'