This research paper examines the intricate interplay of memory, trauma, and survival in the works of Rohinton Mistry and Jhumpa Lahiri, focusing on the psychological impact of displacement on their characters. Both authors delve deeply into the diasporic experience, portraying individuals and families uprooted from their cultural and geographical origins, grappling with fragmented identities, and navigating the challenges of belonging in foreign lands. The study explores how memories—both nostalgic and painful—become critical tools for diasporic individuals to anchor themselves in the past while confronting the alienation of the present. Drawing on trauma theory and psychoanalytic frameworks, the paper investigates how the characters’ lived experiences of displacement lead to emotional scars, manifesting in various forms of psychological distress, including identity crises, isolation, and cultural disorientation. For Mistry, the trauma of displacement is often tied to historical and socio-political upheavals, as seen in the portrayal of Parsi communities’ struggles with marginalization. For Lahiri, the focus shifts to the intimate, interpersonal dynamics of immigrant families, where trauma is passed down through generations, creating a complex web of identity negotiation. Furthermore, the paper highlights how survival becomes a recurring theme in their narratives, as characters develop coping mechanisms to reconcile their fragmented selves with their evolving environments. This survival often involves cultural adaptation, the redefinition of personal and collective identities, and the forging of connections across cultural divides. Through a comparative analysis of selected works, this study sheds light on the universal yet deeply personal experiences of displacement, emphasizing the resilience of the human spirit in the face of cultural alienation and psychological adversity. Ultimately, the research underscores the relevance of Mistry and Lahiri’s works in understanding the complex emotional landscapes of the diasporic condition in a globalized world.