First-time Australian-Indian novelist Aravind Adiga has won the Man Booker Prize with The White Tiger.

The 33-year-old is only the third debut novelist to claim the prestigious literary award in its 40-year history.

He receives a cheque for 50,000 pounds ($125,000) and can expect a significant spike in book sales in the run-up to Christmas. Booker organisers say last year's winner, Anne Enright, has sold around 500,000 copies of The Gathering - largely due to the prize.

"I would like to dedicate this award to the people of New Delhi," Adiga said on accepting the prize, adding that 300 years ago it was the most important city on in the world and could become so again.

Michael Portillo, chairman of the five-member judging panel, praised Adiga's White Tiger for tackling important social and political issues in modern-day India.

"What sets this one apart was its originality," Mr Portillo told reporters in London.

"For many of us this was entirely new territory - the dark side of India.

"It's a book that gains from dealing with very important social issues - the divisions between rich and poor and the impossibilty of the poor escaping from their lot in India.

"It tackles these global issues and social issues with tremendous humour, and it is a book which is extremely readable. It is his first novel, and I imagine [this prize] will come as rather good news to Aravind Adiga."

Adiga was one of six novelists on the shortlist for the prize, which rewards the best novel of the year by a citizen of the Commonwealth of former British colonies or Ireland.

He beat Australian-born Steve Toltz's A Fraction Of The Whole.

Toltz is in London for the awards. Earlier, he said he did not believe he would win.

Also nominated were India's Amitav Ghosh, Britons Linda Grant and Philip Hensher and Ireland's Sebastian Barry.

Adiga was born in Madras on October 23, 1974, and brought up partly in Australia. He holds dual citizenship in both countries.

He studied at Columbia and Oxford universities before working as a journalist. He now lives in Mumbai.

He is the fourth Indian-born author to win the Booker Prize since it was set up in 1969, joining compatriots Salman Rushdie, Arundhati Roy and Kiran Desai.

The book is the ninth winning novel to take its inspiration from India or Indian identity.

Some have accused Adiga of painting a negative picture of modern India and its huge underclass.

But Adiga says the novel is meant to be provocative.

"It's not a book that's meant to ingratiate itself with anyone," Adiga told the BBC before the prize was announced.

"The tone of it was meant to be provocative and even a bit nasty at times. It's meant to get people thinking."

- Reuters/AAP