Signed by Film London and the Film and Television Producers Guild of India, the agreement sees the two cities pledge to 'share ideas and best practice on domestic and international film production and promotion'.
Indian superstar Amitabh Bachchan joined Mayor of London Ken Livingstone to witness the signing at the Whistling Woods Film School at Mumbai's Film City.
Also present were Film London chairman Sandy Lieberson, Film London chief executive Adrian Wootton and Ronnie Screwvala, president of the Film and Television Producers Guild of India.
As part of the agreement, Indian production crews will be able to take advantage of a new 'Indian Productions' Guide to London', which offers practical advice and guidance on working in London and the UK.
Film London is in Mumbai as part of a larger trade and cultural mission that also encompasses the 'London-Mumbai Production Tournament' and a seminar about filming in London. The production tournament aims to give eight London-based and eight Indian-based film producers first-hand experience of the Mumbai film industry.
More than 40 Indian productions filmed in London last year including Jhoom Barabar Jhoom, which was the fifth film by Yash Raj Films to shoot in the UK. Bollywood production is worth an estimated $28m annually to the capital.
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