AVGC-XR push: 13 states draft policies, stakeholders seek inter-state co-production treaties
States such as Maharashtra, Madhya Pradesh, Rajasthan, Kerala, Telangana, and Karnataka have already taken the lead with active AVGC-XR policies in place. Maharashtra approved its comprehensive AVGC-XR policy earlier this year.
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A growing number of Indian states are accelerating efforts to launch dedicated policies for the Animation, Visual Effects, Gaming, Comics and Extended Reality (AVGC-XR) sector, recognising it as a strategic engine for cultural export, creative employment and technology-driven growth. With several states already ahead, many more are now signalling imminent policy roll-outs, offering an important signal about the direction of India’s creative economy.
According to the latest estimates from the Media & Entertainment Skills Council (MESC), India’s AVGC-XR sector is expected to grow at a compound annual growth rate (CAGR) of nearly 16 percent over the next decade. The industry currently employs over 4.5 lakh professionals and has the potential to create more than 20 lakh jobs by 2032. The Ministry of Information and Broadcasting has also confirmed that a national AVGC-XR policy is in the works, which will serve as a guiding framework for state-level initiatives.
Several states, including Assam, Andhra Pradesh, Delhi, Meghalaya, Tripura, Sikkim, Jammu and Kashmir, Tamil Nadu, Odisha, Punjab, Haryana, Gujarat, and Himachal Pradesh, are in advanced stages of preparing their AVGC-XR policies. Many of these are already at the cabinet approval stage and are expected to be notified over the next six to twelve months. Meanwhile, Goa and West Bengal are preparing to renew and update their earlier AVGC-XR policies to align with global standards and recent market trends.
States such as Maharashtra, Madhya Pradesh, Rajasthan, Kerala, Telangana, and Karnataka have already taken the lead with active AVGC-XR policies in place. Maharashtra approved its comprehensive AVGC-XR policy earlier this year, targeting ₹50,000 crore in investments and the creation of over two lakh jobs by 2045.
Madhya Pradesh followed suit with incentives including a 25 percent production subsidy, dedicated media parks through public-private partnerships, and a focus on intellectual property (IP) registration and R&D. Karnataka, which became the first state to draft an AVGC policy in 2012, has now launched its third five-year policy for 2024–29, aimed at creating world-class infrastructure, fostering global collaborations, and promoting startups.
Rajasthan, too, has been proactive in recognising the potential of the sector. Its AVGC-XR policy, launched in 2024, projects that India’s creative content sector could expand from its current value of about USD 3 billion to USD 26 billion by 2030. These early adopters have become benchmarks for other states, which are now designing frameworks that combine fiscal incentives, talent development initiatives, and infrastructure support.
Explaining the rationale behind this nationwide policy push, Ashish Kulkarni, founder of Punnaryug Artvision and board member of the Indian Institute of Creative Technologies (IICT), said the idea is to create a connected national ecosystem of creative industries.
“Many states now have their own AVGC-XR policies, and several associations exist across India. By bringing artists, studios, and associations together, we aim to create policies that not only encourage local production but also support inter-state and international collaborations,” he said.
Kulkarni noted that the global AVGC-XR market currently thrives on international co-productions, where studios from different countries share responsibilities for production, funding, and distribution, often benefiting from co-production funds and tax credits. “We are now exploring a similar model within India,” he explained.
“For example, combining resources between Telangana and Maharashtra, or Delhi and Maharashtra, allows for higher-budget productions that might not be feasible with funding from a single state. This approach helps retain jobs locally, ensures end-to-end production in India, and facilitates global distribution of high-quality content.”
Another senior AVGC-XR executive added that inter-state collaboration would help Indian studios scale up from service-based models to full-fledged IP creators. “Such cooperation will help produce marquee shows of world-class quality while optimising costs. It creates a sustainable model where jobs are retained locally, manpower is effectively utilised, and content can be exported as finished shows rather than just outsourced services,” the executive said.
Events like Comic Con and other gaming expos, he added, could serve as launchpads for new content and intellectual properties, boosting both visibility and revenue.
The Parliamentary Standing Committee on Communications and Information Technology has also urged the government to fast-track the implementation of the national AVGC-XR policy and set clear timelines for each stage of development.
Kulkarni emphasised that developing Indian styles of animation and storytelling is a crucial goal. “Right now, global audiences are exposed mainly to Japanese anime or Western superhero narratives. Our goal is to create content that is uniquely Indian but has global appeal,” he said. This vision aligns with the government’s “Create in India” initiative, which seeks to build India’s brand in the global creative economy.
The expanding network of AVGC-XR policies is expected to encourage both competition and collaboration among states. Early movers like Karnataka, Telangana, and Maharashtra will have the advantage of mature ecosystems and established talent pipelines, while newer entrants will benefit from learning and leapfrogging. However, experts caution that the success of these policies will depend heavily on effective implementation, timely disbursement of incentives, and private sector participation.
