Her tale, set in the suburban streets of Calcutta of the 1960s and told through the eyes of brothers Subhash and Udayan in 'The Lowland', will compete alongside five other works of fiction for the coveted literary award worth 50,000 pounds to be announced here next month.
Born in London and based in New York, 46-year-old Lahiri is the daughter of Indian immigrants from West Bengal.
She is also a member of US President Barack Obama's Committee on the Arts and Humanities.
Her writing is rooted in the Indian milieu and attempts to capture dislocation and ambivalence with a unique play of words.
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'The Lowland', released this month, is already being pitched as an easy front-runner among literary circles here.
Birmingham-based Jim Crace is also being touted as among the 2013 favourites for 'Harvest', a novel about the fragile social eco-system of a remote English village, which the author has claimed will be his last.
If it wins, it will be the shortest novel to win the Booker with just 104 pages.
Eleanor Catton, 28, is the youngest to make the cut with her book 'The Luminaries', while Ruth Ozeki with 'A Tale For The Time Being' and NoViolet Bulawayo 'We Need New Names' complete this year's selection.
Robert Macfarlane, chair of the judges, said the shortlist was "instantly striking because of its global range".
"We looked for books that sought to extend the power and possibility of the form. This is in keeping with the history of the novel. We wanted novel novels," he added.
Each of the six shortlisted writers will receive 2,500 pounds and a hand-bound edition of their book.