The treaty will let UK and Indian film-makers co-produce films that will be eligible for national status in both countries.
The main aspects of the UK-India co-production treaty were first signed in late 2005.
Now, details have been completed by officials and the treaty will comeinto force 'shortly' after constitutional procedures in both countries.
The countries said up to 10 UK-Indian co-productions will be made under the treaty in the first two years.
Also, UK Trade & Investment (UKTI) will run a series of four workshops for Indian film-makers to talk about co-productions and how to work under the treaty.
The UK's Secretary of State for Culture, Media and Sport Andy Burnham said: 'India and Britain both have vibrant film industries and bringing them together in this way opens the door to some exciting new collaborations. Our countries have close cultural and historical connections and it is great that our film industries will be able to work more closely together to develop this further.'