Rai was born into a Tulu speaking Bunt family in Mangalore, Karnataka. Her father, Krishnaraj, was an Army biologist, while her mother, Brinda, is a homemaker.In 1991, Rai won an international supermodel contest (organised by Ford) and was eventually featured in the American edition of Vogue
Rai has received several awards, including two Filmfare Awards from ten nominations. She was awarded the Padma Shri by the Government of India in 2009 and the Ordre des Arts et des Lettres by the Government of France in 2012.