India is an obvious choice for low-cost gaming software, feels Mumbai-based Khurana ANURAG KHURANA CEO/Paradox Studios

Think Simba, think Tom & Jerry, or think Cinderella... and almost invariably the names that come to mind are Hollywood and Walt Disney. But in a familiar twist to the tale, at least one of the two may change in future. Hollywood may be replaced by Hyderabad... or Bangalore... or by any of the half-a-dozen-odd Indian cities that are vying to establish themselves as animation centres.

The point of inflexion is still some way off, but Indian companies have started on their journey well. Tata Elxsi's Visual Computing Lab (VCL) designed the "Liquid Gold" credits at last year's Oscars; Toonz has created Tenali Raman, a series on Cartoon Network; and Dhruva Interactive, a Bangalore-based gaming company, has won global deals with Microsoft Games Studios to work on its latest releases, and with mobile handset vendor Nokia to develop Java-based games.

The animation production services sector in India is still small- about $200-300 million (Rs 880-1,320 crore), according to nasscom. That's less than 0.5 per cent of the $70-billion (Rs 3,08,000-crore) global market, but it's growing at a sprightly clip of over 20 per cent. Its USP: expertise in 3d, flash animation, and strong creative and marketing skills. "Animation is the new sunrise industry," says P. Jayakumar, CEO of the Kerala-based Toonz Animation India.

DQ claims to be the largest animation and multimedia company in Asia. It has been into animation for the last six years, and now works with 28 active clients worldwide TAPAAS CHAKRAVARTI MD & CEO/DQ Entertainment

The big boys of India's tech world are stepping in to tap this potential. Infosys Technologies is said to be looking at setting up an 800-seat animation studio in Bangalore and reportedly negotiating a deal to undertake work on behalf of Walt Disney. Its cross-town rival, Wipro, is also said to be evaluating opportunities in the market. All three companies declined to comment on their plans. Smaller players have also mushroomed: there are now over 180 animation studios in India, compared to a dozen a couple of years ago.

The reason for this heightened interest is money. It costs $250,000-400,000 (Rs 1.1-1.76 crore) to produce half an hour of animation programming in the US and Canada, and $90,000-100,000 (Rs 39.6-44 lakh) even in the Philippines. In India it costs only $60,000 (Rs 26.4 lakh). Put differently, producing a 26-episode 2d series of 22 minutes each in the US costs $4-7 million (Rs 17.6-30.8 crore), while a similar 3D series costs $6-10 million (Rs 26.4-44 crore).

The box office successes of animation flicks like The Incredibles and Shrek have revived interest in this genre of films. In Japan, popular computer games like Pokemon, Monster Farm, Power Stone and Detective Conan, which themselves have high animation content, have been repackaged as money-spinning animation tele-serials. Scouting for low-cost development centres is the logical next step. Hence, India. Or so thinks Anurag Khurana, CEO of Mumbai-based Paradox Studios, a gaming production facility.

Bomberbabe by Paradox, Mumbai

Special effects (SFX in geekspeak) for movies and tele-serials is yet another area where this technology is used. Tata Elxsi worked on a wide range of SFX for the Hindi movie Dhoom. Its VCL offers services like 3d computer graphics, animation and visual effects, which feature in advertisements, films and tele-serials, and gaming. Can it do for Indian animation what its sister company TCS did for Indian software?

Time will tell. For now, Indian companies are clearly very bullish. Toonz, which has attracted international attention for its Tenali Raman animated series, has invested in excess of $12 million (Rs 52.8 crore) on its studios in Trivandrum and Mumbai, and employs over 400 people. DG Entertainment, set up in 1987, claims to be the largest animation and multimedia company in Asia, with over 1,500 employees. In March 2004, it won the Best Animation Film Award at Frames 2004 in Mumbai for its production of the Delta State series. DG Entertainment MD and CEO Tapaas Chakravarti says the firm has been in animation for the last six years and is, today, working with 28 "active clients" worldwide.

Color Chips has worked around the shortage of animation artists by hiring Filipinos. However, foreign artists push up cost of production significantly SUDHISH RAMBHOTLA CMD/Color Chips India

Despite the prospects, however, the path to this new technological El Dorado is strewn with booby traps. Says Jayakumar of Toonz: "Animation is a highly capital-intensive industry. A mid-sized studio costs $3-5 million (Rs 13.2-22 crore)." This amount of funding is enough for studios to get started with an initial run of pilot projects, but not sufficient to carry out high-decibel marketing. Crest Communications CEO A.K. Madhavan says several entrepreneurs tried their luck in the animation industry, but few have anything to show for their labour.

The main issue is an acute shortage of manpower. Against an estimated requirement of 30,000, there are just 12,000 animators in India. The paucity has spun off a whole new market for animation training academies in India. Crest Communications' Madhavan, though, is not too impressed with the quality of animators that many of these academies churn out. "They need about 12 months of additional training before they can be put on live projects," he says.

Paradox's Battledust (top) and Shtranj

Hyderabad-based Color Chips India, which created a 13-episode animation television series for a French production house last year, is currently completing a 26-episode animation television series for a German client. It has worked around this shortage by hiring Filipinos, who now make up a fifth of its 400-strong workforce. "The Philippines has a tiny labour pool of just 1,000 animation artists. China has between 7,000 and 10,000 animation artists who cost about the same as their Indian counterparts," points out Chakravarti.

Encouragingly, the authorities have woken up to this. The Andhra Pradesh government is in the process of introducing 2d and 3d animation and Flash courses in its fine arts colleges, and has plans to set up an animation academy. Karnataka, West Bengal and Maharashtra are also thinking of launching similar courses. These could produce about 2,500 to 3,000 high-quality animators every year.

But these are teething problems faced by every sunrise industry. The country faced and overcame them in software. It's in the process of doing so in biotech. Can we repeat it in animation? The answer to that question will determine whether India can become the animation back-office of the world.