Gandhi was born in Bombay and is the daughter of the late Indian philosopher Ramchandra Gandhi and the great-granddaughter of the Indian Independence movement leader Mahatma Gandhi. She has offered analysis that Mahatma Gandhi's philosophies and policies were influenced by transnational rather than strictly indigenous sources. Her undergraduate degree is from St. Stephen's College, University of Delhi and her doctorate was obtained from Oxford University.
With the publication of her first book Postcolonial Theory: A Critical Introduction in 1998, Gandhi was described as "the first to clearly map out this field in terms of its wider philosophical and intellectual context, drawing important connections between postcolonial theory and poststructuralism, postmodernism, marxism and feminism. She assesses the contribution of major theorists such as Edward Said, Gayatri Spivak and Homi Bhabha, and also points to postcolonialism's relationship to earlier thinkers such as Frantz Fanon and Mahatma Gandhi. The book received much acclaim in its reviews. For example, Chadwick Allen wrote, "...her admirably concise and well written volume will prove invaluable to readers new to postcolonial theory as well as to readers already familiar with this diverse and often diversely confusing field.
Her next book, Affective Communities was written to "[reveal] for the first time how those associated with marginalized lifestyles, subcultures, and traditions--including homosexuality, vegetarianism, animal rights, spiritualism, and aestheticism--united against imperialism and forged strong bonds with colonized subjects and cultures. Gandhi traces the social networks of activists in the late nineteenth and early twentieth centuries connecting Edward Carpenter with M.K. Gandhi and Mirra Alfassa with Sri Aurobindo.
Through these works, Gandhi became noted for proposing a "conceptual model of postcolonial engagement" surrounding ethical premises of hospitality and "xenophilia".