"The Jewel in the Crown" is a novel that takes place primarily in British-controlled India in the 1940s. The central story is that of a young British woman named Daphne Manners who is living in Mayapore, a fictional Indian town. Daphne falls in love with an Indian man named Hari Kumar, who was raised in England but has returned to India after the death of his father. Their relationship is controversial in the small town, where the Europeans, Indians, and those of mixed race are all segregated into separate parts of town.

Daphne and Hari meet one night in a secluded park called the Bibighar Gardens where they make love for the first time. After, they are attacked by a group of Indian men. Hari is tied up and Daphne is raped.

Fearing Hari will be blamed for the rape, Daphne makes him promise to say nothing about being with her in the gardens. He is later arrested along with some other young men by Ronald Merrick, a British police superintendent who has designs on Daphne himself. Hari says nothing in his own defense except that he was not at the gardens that night. Daphne refuses to cooperate in identifying the other young men in fear of implicating Hari.

With no strong evidence, the rape charges are dropped against Hari and the others, but they are found guilty of political crimes against the British occupation and sent to prison. Daphne and Hari never see each other again. She becomes pregnant after the night in the garden and later dies in childbirth.

It is a time of political unrest in India. The British have promised to leave India to govern itself for many years, but when World War II breaks out, Britain fears that the Japanese will invade India if they leave. Indian leaders like Mahatma Gandhi call for the British to leave, and the British administrative and military establishment actively try to suppress any unrest in the towns.

It is against the backdrop of a short period of public protest and unrest that most of the events of "The Jewel in the Crown" take place. The tensions between the native Indian population of the town and the British civil and military authorities are high. Political, racial and religious differences create a dangerous and uncertain environment when the long-standing traditions of British rule begin to unravel.

The novel is written in several episodes and Scott frequently changes the point of view, letting the same story be told through the eyes of different characters. Events are not presented in strict chronological order, and the actual facts of what happens on the night of Daphne's rape are not revealed until the final pages.