Dholakia, 80, is the Deputy Leader of the Liberal Democrats in the House of Lords. Dholakia, who became a Peer in 1997, is also the party's spokesperson for South Asia.
Vince Cable, the Leader of the Liberal Democrats, said the role has been created as part of a wider mission to strengthen links between the Liberal Democrats and Asian communities in Britain.
Dholakia, 80, said it is "truly humbling" for him to be asked to take on this task by Cable.
"We can do much working together in a troubled world to promote a brighter future, not least for the young people in the UK and across Asia," Dholakia added.
Cable said he was convinced for sometime now that the Liberal Democrats needed someone to build better and stronger relations between the party and Asian countries.
"We have, in Navnit Dholakia, someone who enjoys enormous respect among all Asian communities here in Britain," Cable said.
"I believe that he is ideally placed to nurture and promote fruitful relations at every level with countries with which we share many common values and with whom we can build strong ties to our mutual benefit," he added.
Disclaimer: No Business Standard Journalist was involved in creation of this content
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