Prakash Tandon was the son of a civil engineer and born in a canal colony in the Punjab. His autobiographical writings, published in the second half of the twentieth century, give vivid accounts of life in Punjab from the late nineteenth century. Following schooling in Gujarat and Lahore Government College, Tandon sailed for Britain in 1929, aged eighteen years old. His elder brother, Manohar, was already in London. Tandon enrolled at Manchester University with the view to become a Chartered Accountant, of which there were very few qualified Indians at the time.

Tandon spent eight years in Britain. He got involved in the University debating team, and following his degree at Manchester stayed in London to pursue some economics research and his accountancy qualifications. At a students' congress in Oxford, he met his future wife, a Swedish woman, Gärd.

In 1937, Tandon returned to India. He settled in Bombay and he eventually got a job at Unilever. Despite his accountancy qualification, Tandon was employed in the advertising department and earnt less than his British colleagues. He eventually became director of Unilever in 1951. He was a member of the first board of Hindustan Lever in 1956 and then the first Indian Chairman in 1961. Tandon was an extremely influential business leader in independent India, and one of the pioneers of professional management in India.