"It has been my constant endeavour to attract international funding to the Indian entertainment business, as such funding brings with it international marketing expertise too," tells Kapur.
The VIP Media Fund is the largest and most successful film fund in Europe and has $500 million this year to invest. It has also signed a deal with Roland Emmerich, the director of films such as "The Day After Tomorrow".
"I do not believe that the 'independent' style of filmmaking that is so precious to Indian filmmakers will fit smoothly into the 'Hollywood' style of corporate filmmaking," said Kapur.
Two films have been announced as part of this collaboration - "Paani" being produced by Kapur and Deepak Chopra under the banner of their company INTENT, and "Buddha" being produced by Kapur and written by Chopra.
"European funding gives total creative freedom to the filmmaker and indeed French law protects the creative right of the filmmaker to the final cut of the film," said Kapur.
"And considering that three years ago almost 25 percent of all Hollywood investment in films actually came from Germany gives credence to funds like the VIP Media Fund, which is the largest such fund in Germany, currently at almost $500 million in funds."
The collaboration, said Kapur, was part of his efforts to push Indian creativity on to the world stage.
"Both Deepak Chopra and I continue to endeavour to bring Indian creativity and imagination to the international stage, and our venture with the VIP Media Fund is yet another example of our commitment to this."