Bollywood films are more successful in the UK than home-grown productions, with nine Indian productions making it into top ten and three scooping more than one million pounds at box office last year.
A record 74 Indian films were released in the United Kingdom in 2005, compared to just 61 British productions.
"During the last 12 months, nine Bollywood films have entered the top 10 list of films compared with just seven British ones," The Sunday Telegraph reported on Sunday.
Bollywood films, which have achieved significant success in UK include Garam Masala, Krrish and Dosti: Friends Forever.
Garam Masala, a romantic comedy, collected 292,033 pounds in its opening weekend, where as science fiction epic, Krrish made 210,499 pounds during the same period.
The drama, Dosti: Friends Forever, which entered the UK box office chart at number five after grossing 146,069 in its opening weekend also made good business.
Each of the three films have now grossed around one million pounds.
Almost one in six of all films released in Britain last year (16 per cent) were in Hindi while Bollywood produced 11 of the 20 most successful foreign-language films released in the UK in 2005.
Successful Bollywood films can now expect to make more than two million pounds at the British box office and, despite expensive publicity drives and all star casts, a number of high-profile British productions have been eclipsed by Indian films, the report said.
For example, Fanaa, a romantic drama, collected more than 300,000 pounds in its opening weekend while The Libertine starring Johnny Depp, took 278,000 pounds over the same period. So far Fanaa has taken a total of 1,176,000 pounds, almost double that earned by The Libertine.
In addition to the seven British films, which made it to the top 10 over the course of the last 12 months, another 14 films classed as British co-production entered the charts.
These included George Clooney's Good Night and Good Luck, and Woody Allen's Match Point. When Anglo-American productions are added, the number of British films released in the UK in 2005 rises to 89.
The unprecedented level of commercial success has been fuelled by a new generation of young British Asians whose appetite for Indian films means that three of Britain's largest cinema chains, Cineworld, Vue and UCI, now routinely screen Hindi language films.
Bobby Bedi, the Bollywood producer behind cinema successes including The Rising and Bandit Queen, said: "Young British Asians have more money than they have ever had and they are going out more than they used to."
"These films are now showing at multiplexes as opposed to sub-standard venues which used to be the case."
Bedi said the Bollywood films, all of which were subtitled, had developed a far broader appeal than just the Indian community.
"Television programmes like The Kumars At No 42 mean non-Asian audiences are more familiar with India. They are much more willing to engage with Indian movies," he said attributing the box office success to the distinctive character of Bollywood.
"Although Indian films have become more successful, they have not changed in character. No one is looking to Bollywood to make The Full Monty. Indian cinema is celebratory in nature and watching it is like going to India itself. You go to India to see the Taj Mahal, you go there to ride an elephant," Bedi said.
The success of Indian films has encouraged some British-based Indian directors to experiment with the traditional genre of Bollywood films.
Last year, Gurinder Chadha, who directed Bend It Like Beckham, topped the UK charts with Bride and Prejudice, her Bollywood take on the Jane Austen novel. Michael Gubbins, the editor of Screen International, predicted further success for Bollywood films if producers and directors continued to adapt their work to local tastes.
"A lot of British-based directors of Indian origin are beginning to look at how the genre could develop in future," Gubbins said.