Nine films advanced to the next round of voting in the category for the 87th Academy Awards out of 83 movies that had qualified in the category.
"Liar's Dice", a road drama about a tribal woman's journey to find her missing husband, is the debut film of Geetu Mohandas. It stars Geetanjali Thapa and Nawazuddin Siddiqui in lead roles.
The shortlist will be winnowed down to five by specially invited committees in New York, Los Angeles and, for the first time, London from January 9-11, viewing three films each day and then casting their ballots.
'Mother India' and 'Salaam Bombay' are the other two Indian films to have made it to the top five.
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The 87th Academy awards will take place on February 22.
The films that have made it to the shortlist this year include "Wild Tales", an Argentinean film by director Damian Szifron.
One of the strongest contenders is the entry from Estonia, 'Tangerines', a film on civil war within the former Soviet countries, is in the list along with Georgia's entry 'Corn Island' by George Ovashvili.
Mauritania's "Timbuktu" and the quintessential Russian tragedy "Leviatha" by Andrey Zvyagintsev are also in the shortlist.
Pawel Pawlikowski's black-and-white Polish drama "Ida", which won the Best European Film prize at the European Film Awards in Riga, is in the list while the Academy selected 'The Liberator' from Venezuela by Alberto Arvelo.