Rai was born in Mangalore to Krishnaraj Rai and Vrinda Rai. She has one elder brother, Aditya Rai, who is an engineer in the merchant navy and has also co-produced one of Rai's movies, Dil Ka Rishta (2003). At an early age her parents moved to Mumbai where she attended the Arya Vidya Mandir High School in Santa Cruz. Rai entered Jai Hind College at Churchgate for one year, and then moved to Ruparel College in Matunga to finish her HSC studies. She planned to become an architect but gave up her education to pursue a career in modelling.She can communicate in several languages, including her mother tongue Tulu, as well as Hindi, English, Marathi and Tamil.
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