Aggarwal was born on 11 January 1969 in New Delhi, and was raised in Chennai. She was a gold medalist in sociology at Delhi University.

After a brief stint in modelling, and VJing, and appearance in the Doordarshan serial Isi Bahane (1988), she made her Bollywood debut with the musical blockbuster Aashiqui, following which she was much in demand. She posed nude in the short movie The Cloud Door. To recuperate after a 29-day coma.