The Prize celebrates writing on the South Asian region from writers across the globe and is given to the best novel or translations into English of a work on or about the region.
"This is an enormous honour for 'Lowland' and for me personally. I wish I was there in person to receive the award," Lahiri said through a phone conversation from Rome.
Publisher Caroline Newbury accepted the award on her behalf.
Lahiri trumped Indian author Shamsur Rahman Faruqi, who was nominated for his novel translated from Urdu besides Pakistani writer Kamila Shamsie, London-based Sri Lankan author Romesh Gunesekera and first-time novelist Bilal Tanweer from Pakistan.
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The London-born daughter of immigrants from West Bengal said she had begun her award winning book 20 years ago.
"It was my first book but it ended up as the fourth one to be published," said the author adding "I published the book with some apprehension that I have not done justice to the events that transpired in the story."
"I heard about what was happening in Calcutta at that time and based on what I heard I was curious over the years and novel was result of the curiosity," she said.
Conferring the Prize, Shesadri said, "This seems to be an extraordinary grant for several reasons. Remarkable example of en-lighting philanthropy and recognizing South Asian writing. It seeks to discern the dissemination of these writers, celebration of their books and ultimately the integrity of the South Asia."
The event also saw organisers announcing that the DSC Prize won't be announced at JLF from next year and instead pick one South Asian country for the award ceremony.