Narain Karthikeyan is to drive alongside Pedro de la Rosa at HRT, the Spanish team confirmed on Friday.
Karthikeyan started the 2011 season with the team but he was dropped in favour of Australian rookie Daniel Ricciardo after the European Grand Prix.
Ricciardo remained in the seat until Karthikeyan returned for the inaugural Indian Grand Prix and HRT have decided to keep their faith with the 35-year-old for 2012.
"It has taken a lot of hard work to make this happen but I am absolutely elated to feature on the 2012 grid with HRT F1 team. I was pleased with our strong performance at the Indian Grand Prix, in front of my passionate home fans and I look forward to building on this result in 2012," Karthikeyan said.
"I have been training hard since the end of 2011, ensuring I was ready for the rigours of F1 if an opportunity arose. I am delighted to have signed with HRT F1 Team. With the new management, Pedro, and the team, there is definite potential for progress.
"We need to understand that F1 is new to India, we hosted our first race only last year which was a resounding success. To build on that momentum, an Indian driver will certainly keep the interest engaged throughout the season. I am proud to secure an opportunity to forge a stronger connection between India and Formula 1 once again."
Team boss Luiz Perez-Sala added: "I am pleased to count with Narain for this season, as he will contribute continuity and stability. He is a quick, intuitive and secure driver who met his expectations despite a lack of continuity last year. Of the eight Grands Prix he contested in 2011, he only failed to finish on one occasion and had a great performance in the last race he took part in."