Merchant was born in Bombay to Goolshen and Abdulhusein M. Thariani, the fifth child. She was adopted by her maternal uncle and given the surname, Vazirali. She was sent to a finishing school in Switzerland. She is married to Chotu Merchant.

She started acting as a theatre artiste in Bombay. In the 70’s, she became very popular on the television with her show What’s the good word?, which ran for a record 15 years on Doordarshan. The theme music for the show was Glen Miller's version of American Patrol

She later became a trainer and was very successful. She played the enchantress, Madame Manaeksha, in the BBC production Six steps to happiness.