Professor David Parker, executive director of the Asian Literary Prize, the organising body of the award, hailed what he called a "remarkable" selection of books that bring together regional publishers with larger international houses.
"Several of these writers have been celebrated in their own countries and recognised internationally, but never before have we viewed them collectively as Asian writers," said Parker.
"Silent House", an early work from Turkish writer and 2006 Nobel Prize in Literature winner Orhan Pamuk, made the list despite being first published nearly 30 years ago. It qualified for the prize because it appeared in English for the first time in 2012.
Turkey and Iran are among the 35 countries eligible for the prize, which is looking for a new sponsor with London-based Man Group ending its funding for the Asian prize after this edition of the event.
"This book written 30 years ago still spoke to us and spoke to some very present issues to do with the way individuals experience the drive for modernity and rapid urbanisation," Jaggi said at a press conference in Hong Kong via video link from London.
Other works include two books that were shortlisted for the 2012 Man Booker Prize for Fiction, which was won by record-breaking British author Hilary Mantel for "Bring up the Bodies" in October.
Jeet Thayil's "Narcopolis" is his debut novel, a sprawling exploration of opium addiction and its impact on Old Bombay over three decades, described by Jaggi as "a stylistic tour de force with great originality".
"The Garden of Evening Mists" by Malaysia's Tan Twan Eng was also shortlisted for the Booker prize and follows a young law graduate who discovers the only Japanese garden in Malaya and its secretive owner and creator.
Another text appearing in translation is "The Briefcase" by Hiromi Kawakami, which traces the relationship between an office worker nearing 40 and her former literature teacher, a retired widower.
"Between Clay and Dust" by Pakistani author Musharraf Ali Farooqi is set in an unnamed Pakistani city after the partition of India and follows the story of a former champion wrestler.
"Farooqi's tale is more moving for the spareness and restraint with which it is told," said Jaggi, who is joined on the judging panel by award winning Vietnamese-American novelist Monique Truong and Indian writer Vikram Chandra.
She added that Thayil, Eng and Farooqi embodied "Asian writers of a new generation turning to the past in a different way -- all younger writers who are looking not simply at the history of their own nations but regional history."
The winner will be announced on March 14. Winning translators are awarded $5,000.
The Man Asian Literary Prize began in 2007 and is given to the best novel by an Asian writer, either written in English or translated into English.
The 2011 Man Asian Literary Prize was awarded to South Korean author Kyung-Sook Shin for her novel "Please Look After Mom", a story about a family's guilty soul-searching after the disappearance of their elderly mother that has gone on to sell more than two million copies.
The 2012 Man Asian Literary Prize shortlist:
- "Between Clay and Dust" - Musharraf Ali Farooqi (Pakistan)
- "The Briefcase" - Hiromi Kawakami (Japan)
- "Silent House" - Orhan Pamuk (Turkey)
- "The Garden of Evening Mists" - Tan Twan Eng (Malaysia)
- "Narcopolis" - Jeet Thayil (India)
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