Livingstone was joined by Bollywood actress Shilpa Shetty as he kicked off "India Now," a three-month extravaganza of 1,500 events spanning theatre, dance, music, film and food.
The capital's Indian summer aims to spotlight economic and cultural ties with India at a time when Livingstone is trying to attract business from thriving economies across Asia.
The man nicknamed "Red Ken" because of his hard-left past told reporters that part of the reason for India's current prodigious economic success was because it was catching up after years of colonialist oppression.
"If you go back 600 years, someone coming here from another planet would have looked at where was the place to land and meet the inhabitants, they would have gone to India or China, two great civilisations," the mayor said.
"They wouldn't have gone to Europe -- backward, people living in appalling conditions.
"Imperialism damaged massively the economies of Asia and Africa. That world's gone.
"People are now surprised, why is India growing so fast? -- it is just catching up with the ground it was not allowed to occupy during that long, dark night of imperialism."
This year -- the 60th anniversary of independence from British rule -- India's economy is set to grow by 8.1 percent, according to the United Nations.
This places it behind only China, which Livingstone tried to court with a similar festival during Lunar New Year in February, among the world's fastest-growing major economies.
Events planned during "India Now" include a three-week mini-festival in Trafalgar Square in August, featuring Bollywood dance displays, and Regent Street, a busy shopping area, getting an Indian make-over on September 2.
Launching the event, Livingstone and Shetty posed on a boat on the River Thames near Tower Bridge with a replica of the Taj Mahal, one of India's most-visited tourist attractions.
Shetty is the most recognisable Indian star in Britain after winning the reality television show "Celebrity Big Brother" earlier this year despite a racist bullying row.
She said she thought the festival would boost relations between London and India.
"I just absolutely love the fact that the whole perception of India has changed, I think more so over the last three years, and people are very intrigued about India," she said.
Britain and India already enjoy significant links -- some six percent, or 437,000, of Londoners are of Indian origin, making it the largest national minority community in the British capital, the mayor's office said.
But Livingstone said that one of the main goals of the festival was to help Londoners who "know no more about India than the fact that great curries come from there" to understand the value of Indian culture and business.
He is travelling to Mumbai and New Delhi in November to open two offices promoting the British capital there and says he has been working with Prime Minister Gordon Brown for easier access to Britain for Indian business people.
Livingstone also expressed hostility to trade barriers, adding: "It is better that we grow with these emerging economies, so we will do all we can to clear any bureaucratic or regulatory mechanisms out the way."
Among the other celebrities helping to promote the event at its launch were Indian cricket captain Rahul Dravid and fashion designer Manish Arora.
Agence France Presse