Ahluwalia's movie is set in the lower depths of Mumbai's 'C' grade film industry and follows the story of two brothers, who are producers of sleazy horror films in the mid-1980s.
"Miss Lovely" will be showcased alongside 16 movies from different countries in the Un Certain Regard section of the Cannes film fest, said to attract 35,000 film professionals and over 4,000 international journalists every year.
Some of the other films to be screened in the Un Certain Regard section include "La Playa" by Juan Andres Arango, "Les Chevaux De Dieu" ("God's Horses") by Nabil Ayouch, "Trois Mondes" by Catherine Corsini and "Laurence Anyways" by Xavier Dolan.
In the competition section, there are a total of 22 movies including "Moonrise Kingdom", "Cosmopolis", "The Paperboy" and "Reality" from across the globe, but none from India.
The festival, to be held May 16-27, will pay tribute to American director Philip Kaufman by screening his movie "Hemingway & Gellhorn".
Kaufman will also be present at the fest and share insights on his passion for cinema, craft as a filmmaker, his experience on set, the challenges and the pleasures of the profession.
Even without its films, Bollywood will mark its presence at the gala as a bevy of tinsel town stars like Aishwarya Rai, Mallika Sherawat, Sonam Kapoor and Bipasha Basu are expected to walk the red carpet at Cannes this year.