[2][3] Ahmed was born in Bantva, a small town in Kathiawar, British India, as the eldest son and second child of the seven children to Dawood Gandhi and Hajiani Hanifa Bai, a Memon trader family.

Over two years, he learned basic trade of cotton yarn, wheat, and grains in Shimoga (then in Mysore state, now in Karnataka).

[8] Under the supervision of his grandfather, he opened a shop in Hanuman Building in the Tamba Kanta market area of Bombay.

He then opened a small shop in Tamba Kanta to deal in cotton and silk yarn.

By 1933 he was with his firm the biggest supplier of imported yarn to the textile mills in British India.

[10] With a special license granted by the British colonial government, Dawood set up an army vehicle disposable depot in Chattogram.

[11] Dawood further acquired an automobile service and repair company which carried out operations on a large scale.

He was about to finalise a deal with one of the leading traders and industrialists of the time, Nagindas Fulchand Chinai, to establish a viscose manufacturing joint venture when India got partitioned.

[11] Dawood left India and moved with his siblings and their entire families to Pakistan soon after its founding with personal belongings they could carry.

[10] In the following decades, particular in the 1950s and 1960s, Dawood founded several businesses and chaired companies in the cotton, textiles, paper, consumer goods, oil, logistics, insurance, jute, chemicals, motorbikes, home appliances, electronics, and fertilisers industries in East and West Pakistan.

[12] Dawood served as vice-chairman of Pakistan Industrial Credit and Investment Corporation (PICIC),[13] one of the first development finance institutions in the country.

In 1968, Dawood partnered with the American company Hercules Inc. A private loan from the World Bank's International Finance Corporation (IFC) supported the realisation of the fertiliser factory in Sheikhpura.

In 1969, the expansion of multiple projects peaked: Dawood Petroleum Ltd started construction of its Oil Terminal at Keamari.

By the late 1970s and early 80s, although the corporation was doing well financially, Dawood's siblings parted ways with him.