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The New Zealand Excellence Award programme, organised by Education New Zealand and Universities New Zealand, is geared towards helping remedy India's skills shortage, and as well as promoting closer ties between the two countries.
Khushboo Soni is one of a party of 35 top Indian students to study in New Zealand universities in 2018.
She was selected on the strength of her academic results, and a statement of intent and CV she had sent.
''I am so, so happy. I can't explain it in words,'' she said.
Ms Soni, who is from the city of Sirsa, chose Otago because she wanted to study forensic science, which she said was not offered at any of the universities in her country.
The other scholarship winners who chose to study at Otago were Kryson D'Gama (24), studying physiotherapy, Arpita Dutta (27), studying business data science, and dental student Ritu Ganjigatti (23).
Ms Soni said she was settling into university life well and thought it was ''a kind of heaven'', but admitted she missed her family.
Other students had been ''friendly and welcoming'' and she was also enjoying the teaching style of academic staff.
Scholarships are worth $5000 in tuition fees.
The programme was established in 2016 and in 2017 four Indian students attended Otago on the scholarship.
Early data reveals University of Otago international student numbers have climbed in 2018, with student numbers higher by 81 equivalent full-time students (EFTS) than they were this time last year.
Numbers started to increase again two years ago, after a decline from around 1900 EFTS in 2006 to 1363 in 2015.
University head of international engagement and business development Mark Howard said Indian students made up 106 EFTS this year, the highest number of Indian students yet.
He was expecting further growth next year as the university was focusing on that part of the world.
The bulk of the University of Otago's international students came from the United States, China and Malaysia.