Final answer:
Bhanu Athaiya was the first Indian to win an Oscar, receiving the award for Best Costume Design for the film 'Gandhi' in 1983.
Step-by-step explanation:
The first Indian to receive an Oscar Award was Bhanu Athaiya. She won the award for Best Costume Design for her work in the film 'Gandhi' in 1983. Athaiya's achievement marked a significant milestone in the history of Indian cinema, as she became the first Indian to win an Academy Award. While Satyajit Ray was bestowed with an Honorary Oscar in 1992, Bhanu Athaiya remains the first Indian to win in a competitive category. A. R. Rahman and Shabana Azmi have also won Oscars and received recognition for their contributions to cinema, but they were not the first from India to achieve this honor.