Left-handed opener Gambhir, the first player to go under the hammer for the tournament's fourth edition, was bought by Kolkata Knight Riders for $US2.4 million ($A2.42 million), far higher than his base price of $US200,000 ($A201,50).
Gambhir was soon joined in the exclusive bracket by all-rounder Pathan, who was snapped up by the same franchise for $US2.1 million ($A2.12 million). Pathan's reserve was $300,000.
The Indians eclipsed the record price of England duo of Kevin Pietersen and Andrew Flintoff, who went for $US1.55 million ($A1.56 million) each in 2009.
This time, Pietersen, with a base price of $US400,000, was bought by Deccan Chargers for $US650,000 ($A655,000).
Among the $US1 million men were New Zealander Ross Taylor, Sri Lankan Mahela Jayawardene, South African AB de Villiers and India's Yuvraj Singh.
Former West Indies captain Brian Lara and a host of England's Ashes heroes are also among 353 players up for grabs at the two-day auction in Bangalore.
Lara and England paceman James Anderson are among 21 with the highest reserve price of $US400,000 for a three-year contract.
Other foreigners on offer included veteran Australians Adam Gilchrist and Brett Lee, South Africans Graeme Smith and Jacques Kallis, and New Zealand's Daniel Vettori.
The annual IPL tournament revolutionised the sport in 2008 with a high-octane blend of international star players, Twenty20 matches and Bollywood glamour.
But its fortunes dipped dramatically last year after allegations of massive corruption, money-laundering and tax evasion, as well as secret deals to hide teams' real owners, and even links to India's criminal underworld.
IPL founder Lalit Modi -- whose brash style personified the event -- was thrown out by the BCCI, the sport's governing body in India, over accusations about his conduct and organisers hope this year will be fresh start.
The tournament, to be held from April 8 to May 22, will feature 10 teams, including two new sides -- Pune Warriors and Kochi.
Twelve players have been retained by their original franchises, with Indian captain Mahendra Singh Dhoni staying with the Chennai Super Kings and Shane Warne and Shane Watson sticking with the Rajasthan Royals.
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