Actress Vidya Balan has been roped in as the brand ambassador of Victoria's Indian Film Festival to be held in Melbourne this year.

"I am delighted to be named as the brand ambassador for the Indian Film Festival in Melbourne. I love the format of the festival and the wide range of films screened," Vidya said in a statement.

"It not only showcases the best of Indian cinema but also provides a platform for young, upcoming film makers through its short film competition," she said.

"When I was in Melbourne, I was smitten by the city and its love for films and its multi-cultural spirit. I am sure the festival will contribute greatly to add to that spirit," Vidya said.

Premier Ted Baillieu said strengthening ties with Indian cinema is a chance for Victoria to showcase what they have to offer in the arts.

"India's burgeoning film industry offers opportunities for Victorian co-production projects that build on our state's strengths in the creative arts," Baillieu said.

"Our government seeks to promote Victoria as a place that has the skills and infrastructure to work in film production, and where film producers can find a variety of people who can speak a range of languages and possess a cultural understanding."

"The festival will celebrate Indian cinema and create bonds of greater understanding and experience between the communities of Victoria and India," he added.

The 10-day festival will take place in mid-2012 and showcase the depth and diversity of the Indian film industry.

Louise Asher, minister for innovation, services and small business, said India is one of the largest film industries in the world and it makes sense to develop ties between our film industries.

"The festival complements a range of initiatives to develop ties between the Victorian and Indian film industries, including a Victoria/India Co-production Initiative which will see ten Victorians travel to FICCI Frames in Mumbai in March," Asher said.

"The initiative will also support up to three Victorian companies to develop a feature film, television or digital media project as a joint venture with a production entity based in India," she added.