Directed by debutante filmmaker Raam Reddy, "Thithi," was the only film from India that was selected and screened in the festival.
Elated by the movie's win Reddy said the response from the Chinese audience was overwhelming and he is happy with the experience.
"Shanghai is the first place the film is being screened in Asia outside of India, and I was really keen to see how people from China and different parts of Asia react to the film. The Jury was from China, Japan and Korea and they unanimously loved the film.
Other films nominated in the best film category were "One Night Only (China)," "Hana's Miso Soup (Japan)," "Land of the Little People" (Israel) and "Detective Chinatown" (China).
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Based in a small village of Karnataka, the script of the dramatic comedy has been written by Reddy along with Ere Gowda.
"I am really happy that people around the world have seen and loved Thithi, set in a small but culturally rich village in Karnataka, which is my native place," Gowda said.
"I dedicated the award in my speech to the cast, especially Gadappa, who are the collective soul of the film. Feeling amazing, thank you everyone for all the support!
"Last but not least, the film is still in theatres! Don't miss it on the big screen!," Reddy wrote.
Produced by Pratap Reddy and Sunmin Park, "Thithi" has screened in over 13 prestigious international and national film festivals and won 15 awards.
The movie won First Feature Award for the best debut feature at the Locarno International Film Festival where it had its international premiere in 2015.
The film revolves around Gadappa his materialistic middle-aged grandson, Thamanna, and his confident pubescent great grandson, Abhi. The story begins after the death of Century Gowda, a highly cranky 101 year old man.