Foreign Affairs Minister Julie Bishop announced on Tuesday that Mr O'Farrell would take up the unsalaried five-year appointment from August 1.

The council is chaired by Ashok Jacob, formerly a key lieutenant of billionaire gambling mogul James Packer, who was awarded a casino licence in NSW while Mr O'Farrell was premier.

Mr Jacob is a former director of Crown Ltd, which won the right to operate a "restricted gaming facility" at Barangaroo from November 2019.

Mr O'Farrell was appointed by Ms Bishop, who noted that as premier he led annual trade missions to India and initiated the sister state relationship between NSW and Maharashtra in 2012.

"He joins the AIC as Australia further strengthens its people-to-people and institutional links with India," she said.

"The council will build on the momentum established through the recent visits of Prime Minister [Tony] Abbott to India and  Indian Prime Minister [Narendra] Modi to Australia."

The AIC seeks to build bilateral collaboration in education, science, sport, and the arts and promotes Australia's trade and investment interests.

The appointment comes three months after Mr O'Farrell retired from the NSW Parliament at the March 28 state election.

Mr O'Farrell resigned as premier in April last year after misleading the Independent Commission Against Corruption over receiving a $3000 bottle of wine from Liberal Party identity Nick Di Girolamo.

He did not respond to a request for comment.