"You have to campaign if you want to win the Oscar. It is like a political campaign, " said Nair, whose first film "Salaam Bombay", based on the lives of street children in Mumbai, was nominated for an Oscar in the best foreign film category in 1988.
Nair also said that the globally 'coveted' Oscar awards were a marketing gimmick, which was aimed at patting the backs of the American film industry.
"The Oscar awards were initially meant to be its very own 'shabaashi' for the American film industry and over the years it has evolved into a lot more, " Nair said, adding that she was not too enamored of the award which she said was primarily instituted as a "marketing strategy".
She was speaking to reporters on the sidelines of the 41st International Film Festival of India (IFFI), where a retrospective of 14 of her films is being screened.
Nair, who has directed many internationally acclaimed films like "Mississippi Masala", "Kama Sutra" and "The Namesake", also said that the slew of India film related awards which have mushroomed throughout the country and the diaspora abroad needed a lot more rigour and quality.
The Academy award, also known as the Oscar award, is an event of global fame instituted in 1929 by the American Academy of Motion Picture Arts and Sciences in order to recognise excellence of professionals in the film industry, including directors, actors, and writers.
This is year Aamir Khan's "Peepli Live" is India's official entry for the Oscars in the foreign language category.