Thirteen-year-old Lakshmi lives in a remote Himalayan village with her mother, Ama, and her gambling-addicted stepfather. After a drought and monsoon destroy Lakshmi's home and her stepfather gambles away the family's few remaining possessions, Lakshmi's stepfather sells her to a sex trafficker under the guise that Lakshmi will work as a maid. A series of traffickers who pretend to befriend Lakshmi smuggle her across the border into India. She is sold to Happiness House, a brothel run by the tyrannical Aunty Mumtaz. Mumtaz beats, starves, and drugs Lakshmi until she submits to prostituting herself. Mumtaz promises Lakshmi will be released from the brothel and return home once she repays her ten-thousand rupee debt.
Lakshmi befriends the other women in the brothel, including Shahanna, a kindhearted girl from Nepal; Anita, a woman whose face is disfigured after a brutal assault by Mumtaz's henchmen; and Pushpa, an ill mother of two who entered Happiness House after her husband's death. Lakshmi's friends teach her how to survive in the brothel, warning her against venereal diseases and American customers. Lakshmi distracts herself from near-constant abuse by daydreaming of home and watching television.
One day, Pushpa's eight-year-old son Harish offers to teach Lakshmi Hindi and English. During their lessons, Lakshmi pretends she is back in school, repeating the English phrase, "My name is Lakshmi. I am from Nepal. I am thirteen years old," until she perfects it. Later, an American posing as a customer visits Happiness House and asks Lakshmi if she wants to leave. Since Lakshmi is too afraid to answer him, the man leaves a card with the name and number of a women's shelter. Though Lakshmi does not trust the American, she hides the card.
A series of upsets befall the brothel. Shahanna is taken away during a police raid, and Monica, the brothel's movie-star-obsessed highest earner, contracts HIV. Pushpa becomes too sick to continue working for Mumtaz, so she and her two children leave the brothel. Shilpa, Mumtaz's assistant, reveals that Mumtaz does not send money back to Lakshmi's family and has no intention of releasing Lakshmi from slavery.
Another American aid worker visits the brothel. He takes Lakshmi's photo and shows her photographs of girls living in a shelter for victims of child sex trafficking. He promises to return for Lakshmi. While Lakshmi waits, she begins to hope that she might return home, and her exploitation becomes unbearable. The American does return, along with the police. The story ends with Lakshmi proclaiming, "My name is Lakshmi. I am from Nepal. I am fourteen years old."
