As India’s AVGC-XR sector gears up for significant growth, the nation stands on the cusp of becoming a global leader in animation, visual effects, gaming, and extended reality. With the right mix of technological innovation, government support, and strategic investments, the sector is not only poised to double its market size but also create millions of jobs, driving India’s economic and creative landscape into the future.th

India’s Animation, Visual Effects, Gaming, and Comics (AVGC) sector is on track for significant expansion, with a projected doubling in market size over the next four years, according to a new report from CII-Grant Thornton titled ‘FX & Beyond: Shaping India’s AVGC Landscape.’ Released at the CII Summit FX 2024, the report highlights the sector's potential to reshape India’s Media & Entertainment (M&E) landscape and contribute substantially to the economy.

Currently, the AVGC-XR sector constitutes around 20% of India’s M&E industry. This sector is rapidly evolving, with the animation and VFX segment alone expected to increase from $1.3 billion in 2023 to $2.2 billion by 2026. This growth will elevate its share of the M&E industry from 5% to 6%. Similarly, the online gaming segment, valued at $2.62 billion, is forecasted to surge to $4.6 billion by 2026, increasing its contribution to the M&E sector from 10% to 13%.

Factors Driving Growth

The report underscores several key factors driving this expansion. The rising global demand for high-quality content in entertainment and gaming is positioning India as a pivotal player in content creation. The adoption of AI (Artificial Intelligence), ML (Machine Learning), and 5G technology is enhancing production efficiency and unlocking new creative possibilities within the industry. These technological advancements are crucial for the sector’s growth, providing India with the tools to lead in global markets.

Moreover, government support is playing a vital role. Strategic investments in talent development, infrastructure, and technology are fostering an environment conducive to growth. The sector is expected to generate over 160,000 jobs annually, with a total of 2 million new jobs anticipated by 2030.

Recommendations and Future Outlook

To fully harness the potential of the AVGC-XR sector, the report calls for the swift implementation of the National Draft Policy Framework for AVGC-XR. This framework includes the establishment of a self-sustainable fund to support small and medium-scale content developers. The fund would have clear budget allocations and an inclusive scope extending to training institutes, technology providers, and marketing efforts.

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Another key recommendation is the formation of a National AVGC-XR Mission. This mission would provide a strategic roadmap for the sector, leveraging India’s rich cultural heritage to appeal to global audiences. Additionally, the report suggests reducing import duties on essential equipment to make high-end production more accessible.

Biren Ghose, Chairman of CII AVGC-XR and Managing Director of Technicolor Asia Pacific, emphasized the need for India to embrace a more virtualized world. He advocated for the creation of multilocation high-end hubs to support large-scale, high-tech production. Ghose also highlighted the importance of digital transformation, suggesting that the AVGC policy and national centers of excellence should create a network of pathways to foster this change.

Conclusion

As India’s AVGC-XR sector gears up for significant growth, the nation stands on the cusp of becoming a global leader in animation, visual effects, gaming, and extended reality. With the right mix of technological innovation, government support, and strategic investments, the sector is not only poised to double its market size but also create millions of jobs, driving India’s economic and creative landscape into the future.
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