"Gully Boy", which premiered at the Berlin Film Festival in February, focuses on the life of an aspiring rapper in Mumbai's Dharavi slum.
The Best International Feature Film award was earlier titled Best Foreign Language Film award.
Actor-filmmaker Aparna Sen was the head of the jury for this year's selection committee.
Besides our Telugu movie "Dear Comrade" that was the only film from Telugu, 26 other movies across the country have lost to the Bollywood movie "Gully Boy" starring Ranveer Singh and RRR girl Alia Bhatt in the lead roles. As always, I will keep striving towards making the flag of Hindi cinema fly high.
An elated Ranveer said he is proud of Zoya Akhtar and the entire team. In a press statement, Alia Bhatt said, "I just hope, pray and wish that we make it to the nomination and then win". I'm especially proud of and happy for Zoya! "Gully Boy" is her (Tiger) baby, and I am blessed to have been a part of her maverick vision". This is a first and it's a big deal for us. "We are happy that the whole nation has chosen our film and it is very exciting". Alfonso Cuarón's Roma was the victor at last year's event.
The 92nd Academy Awards will take place on February 9, 2020 at the Dolby Theatre in Los Angeles, US.