The '70s legend, who recently received accolades for his role as Rauf Lala in Agneepath, said that he was delighted to attend the event.
"It's a funny mix, combining Indian films with economics. As a representative of the Indian film industry I can only bring the glamour quotient," Kapoor explained.
"We spread smiles and create tears in the name of entertainment. But in whatever small way we can create awareness by partaking in discussion of current topics and happenings back home, we try to. It gives me great pleasure to be here to be able to spearhead that kind of thinking. I'm very happy to be here."
Sanam Arora - CEO of the LSE's Society for the Promotion of Indian Culture and Ethos (SPICE) who spearheaded the India Week events - said: "I am delighted to have Mr Kapoor with us as our chief guest at the LSE. It makes for a very interesting mix bringing Indian cinema to a world which is known for banking, economics and finance.
"It's the tenth year of SPICE and this year we decided to take India Week to a much higher level. We wanted to celebrate all facets of India, from economics to politics to Bollywood."
Kapoor told Digital Spy that he felt Indian cinema is given a warm reception the world over, saying: "It's because we give entertainment. Somewhere all Indians are very Indian. In their heart they miss home and they want to hear stories. Our roots are attached to our own countries and somewhere there is an affinity towards it."
"I am delighted. We have been part of Indian cinema for just about 80 years," Kapoor said. "My grandfather started in the silent era. My father, my uncles, my brothers, myself and now my son. I'm very proud of the fact that we have been able to keep the legacy going.
"Thank you for all your patronage, your love and your blessings, and I'm sure Ranbir would like his son also to keep the tradition going."
Speaking of his son Ranbir's recent successes, the actor added: "I think he should be working hard. He has the passion, the vision to see what is happening. I leave it at that. I don't want things to go to his head."
Kapoor later reflected on his career and answered questions from students in a two-hour Q&A session chaired by Rachel Dwyer, who is professor of Indian culture and cinema at SOAS.
The actor attributed success in film and in life to passion, saying: "I feel whatever work or vocation you do, you must have passion for it. Some sense of dedication, passion and love for it. Success and failure is part of it, but you must be passionate about the field you have chosen."
The India Week events will conclude with a Bollywood night hosted by BBC Asian Network presenters Raj and Pablo.