Indian Animation Sector: Insights & Expansion Patterns
India's animation, visual effects (VFX), and post-production industry is set to experience significant growth over the next decade, with projections placing the market size at around ₹25,000 crore (~$25 billion) by 2032. This expansion is expected at an approximate 38% Compound Annual Growth Rate (CAGR) from its 2024 valuation of about $1.3 billion.
The growth of the industry is primarily driven by digital transformation, the expansion of Over-The-Top (OTT) platforms, AI-assisted workflows, augmented reality (AR)/virtual reality (VR) technologies, and increased demand for gaming and immersive content.
Key drivers and trends include significant investment by OTT platforms like Netflix, Amazon Prime Video, and Disney+ Hotstar fostering original Indian animated content. The use of animation and VFX is also increasing across films, gaming, advertising, education, and virtual production. Tech integration such as AI-assisted workflows, AR/VR applications, game animation, and virtual production technologies are streamlining production and enhancing creativity.
However, the industry faces challenges such as talent shortages, fragmented workflows, infrastructure gaps, and variability in global demand. These issues are being addressed through technology adoption and skill development initiatives.
Several major players are driving growth in the industry. Notable Indian animation studios include Toonz, Green Gold, Assemblage, and DNEG, particularly in the IP development and outsourcing segments. Global tech companies like Epic Games, NVIDIA, Mo-Sys Engineering, Disguise, HTC, Adobe, and others are also impacting the Indian space, supplying critical hardware, software, and real-time production tools. Indian studios often partner internationally for VFX projects, benefiting from advances in such technologies and growing demand.
The Indian animation, VFX & post-production segment stood at ₹103 billion (~$1.3 billion) in FY 2024. The segment contracted by ~9% in FY 2024, but the VFX sub-segment declined ~14% in the same year. Despite this contraction, AI tools are accelerating production phases, while AR/VR support for experiential storytelling and game animation pipelines are broadening studio capability sets.
The growth of the industry is expected to generate nearly 2 million jobs over the next decade, led by domestic IP projects, educational content exports, and localized OTT demand. AI tools like procedural rigs, automated lip-sync, and style transfer are reshaping workflows in the animation industry. Tools like Project Tracker provide Netflix-level clarity on investment intent and real-time pipeline intelligence for media CXOs.
Studios are embedding AR/VR pipelines for immersive storytelling, especially in heritage and experiential projects. Assemblage Entertainment, founded in 2013 in Mumbai, handles global projects and works with Hollywood clients. The talent shortage in the industry requires graduates from institutions like the National Institute of Design (NID), IIT Media labs, and many depend on personal networks to break into top tiers.
Government-backed initiatives aim to bridge the talent gap and create regional hubs through skill development programs and incubators. The broader AVGC (Animation, Visual Effects, Gaming & Comics) ecosystem continues to underpin India's media supply chain.
This robust growth outlook positions India as a fast-rising hub in global animation, VFX, and post-production, supported by both expanding domestic consumption and outsourcing/export opportunities leveraging cutting-edge technology.
Artificial intelligence tools, like procedural rigs, automated lip-sync, and style transfer, are reshaping workflows in the animation industry, contributing to its growth over the next decade. The expansion of Over-The-Top (OTT) platforms, such as Netflix, Amazon Prime Video, and Disney+ Hotstar, is fostering original Indian animated content, which aligns with the increasing demand for gaming and immersive content powered by technology.
