The Richard Branson-owned airline's move comes six months after Kingfisher Airlines suspended its London flights and plans to join Virgin's rival British Airways-led oneworld alliance.
Kingfisher's entry into oneworld would have given British Airways a bigger passenger feed from Indian market, and made difficult for Virgin to grab market share.
Virgin had operated London-Mumbai flights between 2005 and 2009.
Its return comes at a time when other foreign airlines are cutting down on their flights in India or pulling out altogether, citing increase in operating costs and charges at Delhi airport.
Virgin's CEO Steve Ridgway said that his airline will be able to attract airline passengers from India.
"We had to withdraw our service in 2009 due to the global economic slowdown, but we always said if it was economically viable we would come back.
The time is now right, with the Mumbai-London market growing by nine per cent since 2009, and we are looking forward to starting our flights next month and serving the people of Mumbai," Ridgway said in an email response to Business Standard.
Virgin currently flies on the Delhi-London route.
Mumbai-London is the second busiest international route from Mumbai and the 12th busiest route from London (1 million passengers flew on this route last year, according to Virgin).
Currently, Air India, British Airways and Jet Airways fly five times daily between the cities.
There are also Gulf-based and European carriers who link the two cities, making it a very competitive market. Emirates has eight daily flights between Dubai
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