Born Ismail Noormohamed Abdul Rehman was born in Bombay, he was the son of Hazra and Noormohamed Haji Abdul Rehman, a Mumbai textile dealer. He grew up bilingual in Gujarati and Urdu, and learned Arabic and English at school. When he was 11, he and his family were caught up in the 1947 partitioning of India. His father was president of the Muslim League, and refused to move to Pakistan. Merchant later said that he carried memories of the "butchery and riots" into adulthood.He studied at St. Xavier's College, Bombay and it was here that he developed his love of film. When he was 22, he traveled to the United States to study at New York University, where he earned an MBA. He supported himself by working as a messenger for the United Nations and used this opportunity to persuade Indian delegates to fund his film projects. He said of this experience that "I was not intimidated by anyone or anything". In 1961, he made a short film "The Creation of Woman". It was shown at the Cannes Film Festival and also received an Academy Award nomination.