Davidar was educated at Madras (now Chennai) and Harvard University (where he obtained a diploma in publishing). He began his career as a magazine editor in Bombay working for magazines like Himmat, Keynote and Gentleman. In 1985, while still in his mid-twenties, he became one of the founding members of Penguin in India, where he edited or published authors like Kiran Desai, Arundhati Roy, Vikram Seth, Vikram Chandra, Rohinton Mistry, Salman Rushdie, Upamanyu Chatterjee, Khushwant Singh, R.K. Narayan, Shobhaa De, Romila Thapar, Shashi Tharoor, Suketu Mehta, William Dalrymple, Mohsin Hamid and Ramachandra Guha. In 2004 he was transferred to Penguin Books in Canada, where the authors he publishes include Philip Roth, Khaled Hosseini, John le Carré, Alice Munro (in paperback), Stuart McLean, Margaret Macmillan, Joseph Boyden, Zadie Smith, Kim Echlin, Hisham Matar, Adrienne Clarkson, Michael Ignatieff and John Ralston Saul.

Davidar is the author of the novel The House of Blue Mangoes , which was published in 2002. It was translated into 16 languages and was a New York Times Notable Book and a Book Sense Pick. His second novel, The Solitude of Emperors, was published in 2007 and was a finalist for the Commonwealth Writers' Prize. His wife, Rachna, a bookseller, has worked for a number of booksellers in India and Canada, including The Bookshop in New Delhi (which her family owns), Nicholas Hoare, Ben McNally Books and McNally Robinson in Toronto.

In an interview, Davidar describes Christianity and Indian tradition as intertwined in his novels. He regards Indian Christianity as distinctive due to its donning Indian garb since its introduction into the country in the 4th century (AD).