I'd recommend looking beyond the obvious literary fiction. 'Mafia Queens of Mumbai' by S. Hussain Zaidi is non-fiction, but reads with the pace and drama of a novel. It profiles the fascinating, often terrifying women who operated in the Mumbai underworld. It's gripping, well-researched, and offers a perspective you rarely see. It shows that real-life stories from India can be as compelling as any thriller.
The term 'essential' can be tough, but if you're after modern Indian fiction that shaped conversations, 'The God of Small Things' by Arundhati Roy is unavoidable. It's not just a family saga; it's a lyrical, heartbreaking look at caste, love, and how tiny moments fracture lives. The prose itself is a character, winding and poetic in a way that demands your full attention.
Sure, some find it dense, but its impact on bringing Indian English literature to a global stage is undeniable. For understanding a certain kind of post-colonial melancholy and beauty, it's a cornerstone. I'd pair it with something more contemporary afterwards to see how the conversation evolved.