The first screening of a rough cut of the film - which stars Naseeruddin Shah and Om Puri - was held at West London's Screening Rooms in Soho for representatives of the UK Film Council earlier this week.
"My film is about raising difficult questions in these turbulent times when an image of extreme Islam seems to be hijacking the world agenda. During the London bombings of 2005, I saw so much Islamophobia on the streets of London. I address this aspect as well as the threat posed by the emergence of extreme Islam," Mundhra said after the screening.
"One of the characters in the film asks 'Is it a crime to be a Muslim?' I sincerely believe Islam is a religion of peace and Muslims all over the world want to live in harmony."
Also featuring Brian Cox and Great Scachi, the film questions the role of London Police and explores the controversial theme of how potential terrorists were recruited in the aftermath of the four suicide bombings that killed 52 people and injured nearly 800.
The film has been invited for a screening at the forthcoming Dubai International Film Festival in December, Mundhra said.
He said: "In fact, we are keenly looking at two international film festivals - Dubai and Berlin - for the first formal screenings of the film."
He revealed he had signed award-winning composer John Altman, who scored in Miramax's smash hit "Shall We Dance", starring Richard Gere and Jennifer Lopez, to score the film's background music. The music will include a Sufi qawwali.
The film is produced by the US-based Aron Govil, who runs the company Cine Boutique. Govil confirmed that he had started negotiations with major distributors to screen "Shoot On Sight" worldwide.
The film is expected to be released in early 2008.
Mundhra said: "I'm proud to have raised a real award-winning cast and crew. Between them they have won a number of National and International Awards. Take, for example, Naseeruddin Shah and Om Puri who are most fearsome actors in India. Brian Cox and Great Scachi represent the best of Britain.
"I'm anxious because the film is set for release. This could be the most unnerving moment for any film director. However, my gut feeling is that 'Shoot On Sight' is going to be an altogether path-breaking take on the rise of Islamic fundamentalism."
The film's director of photography is Madhu Ambat who worked with Mundhra on "Provoked". A National Award winner for his photography in G.V. Iyer's "Adi Sankaracharya", Ambat has worked with Manoj Night Shyamalan on "Wide Awake" and Mani Ratnam's "Anjali".