Highlights
- The Orange Economy covers all industries where value comes from creativity and intellectual property.
- India's media and entertainment sector was valued at roughly $30B USD in 2024.
- The core tension India faces is whether it will build original, competitive IPs or remain a cost-efficient outsourcing hub.
Every few decades, India finds a new economic identity. In the 1990s, it was software. In the 2000s, it was business process outsourcing. In the 2010s, it was fintech and startups. Now, as the Union Budget 2026 made clear, the government is betting on something it calls the Orange Economy. It is the business of creativity, culture, and intellectual property. The concept includes animation, gaming, visual effects, comics, live entertainment, and OTT content. These are the industries where what you imagine is worth more than what you manufacture.
India's media and entertainment reached $29.4B in 2024. A young, digitally native population is producing and consuming content at a scale that is genuinely hard to overstate. The policy infrastructure is arriving too, with labs, institutions, and international partnerships all pointing in the same direction. And yet, a question sits underneath all of it that the budget speeches tend to skip past: Is India building a creative economy, or a really talented workforce for someone else's?
What Actually is the Orange Economy?
The term “Orange Economy” was coined in 2013 by Colombia’s former president Ivan Duque and former culture minister Felipe Buitrago. According to them, it is an ecosystem of economic activities where value is primarily generated from creativity, culture, and intellectual property. Such economies bridge traditional cultural expressions like arts, crafts, and festivals with modern digital domains like gaming, VFX, and OTT platforms. They called it orange because that is the color associated with creativity and cultural identity across many traditions.
The idea was that this category of economic activity had been systematically undervalued and undermeasured, treated as a soft accompaniment to the real economy of manufacturing, services, and commodities, rather than as an engine in its own right. The numbers they were pointing at were substantial even then, and they have only grown since.
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South Korea's creative sectors generate over $12.4B in export revenue annually, employing over 600K people, a figure that exceeds the country's consumer electronics exports. That is a core economic sector that South Korea built deliberately over two decades, using sustained government investment, institutional coordination, and a willingness to treat culture as a strategic export. The Ministry of Culture, Sports and Tourism funded the Hallyu strategy. Netflix has committed $2.5B to Korean content between 2023 and 2027. The Korean Wave, as it is known, did not emerge organically, and it was designed with deliberation.
India is now, somewhat belatedly, trying to do something similar. The language has changed in the last two years from treating animation, gaming, and VFX as niche industries to treating them as central to the country's economic ambitions. The Union Budget 2026 marked a clear shift in tone. The orange economy is a strategic economic sector, with the government's push to establish AVGC content creator labs across thousands of schools and hundreds of colleges signalling that creativity is being institutionalized as economic capability.
India Has the Scale it Needs
Before assessing whether India can actually pull this off, it helps to understand the raw material it is working with. Gaming has emerged as the largest single revenue driver within the AVGC cluster. India's gaming market was estimated at $6B in 2025, with the broader AVGC sector projected to require close to two million professionals by the end of the decade. According to Niko Partners, India is the fastest-growing gaming market in Asia and MENA, with player spending expected to reach $1.5B by 2028 and the total gamer base hitting 724M by 2029.
Creative exports from India surged 20% in 2023-24 to earn more than $11B in foreign exchange, and the sector currently supports over 10M livelihoods directly and indirectly. Nearly 25% of total viewership for Indian OTT content now originates from overseas, which means Indian storytelling is already finding international audiences at scale.
The demographic argument, often overstated in Indian policy discussions, is genuinely relevant here. With over 65% of Indians under 35, demand for interactive content is rising, and the talent base, if properly trained, is disproportionately young relative to most competing markets. Animation studios in Canada and the UK are aging workforces. India, if it gets the training infrastructure right, will be producing creative-tech professionals for decades while other markets are managing succession problems.
The government has begun acting on this. Budget 2026 proposed supporting the Indian Institute of Creative Technologies in Mumbai to set up AVGC content creator labs in 15K secondary schools and 500 colleges, with an INR 250 crore ($26.04M) allocation and the explicit goal of building a talent pipeline from the ground up. A new National Institute of Design is proposed for eastern India to address the shortage of trained designers in the country's rapidly expanding design sector.
The Problem Nobody Wants to Say Out Loud
India has been a significant player in the global animation and VFX industry for years, but primarily in a specific and structurally limited way. Publishers outsourcing character rigging to Indian studios have been able to cut asset costs by 35% while meeting live operations deadlines, making India an attractive destination for cost-sensitive production work. That is not a bad business.
Studios in Mumbai, Pune, Hyderabad, and Bengaluru have built real capabilities and real employment on the back of it. But it is, at its core, a services relationship. The IP belongs to someone else. The upside belongs to someone else. India does skilled labor at competitive rates, and the creative value ends up being owned outside the country.
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The critical question the AVGC labs initiative raises is whether India can move past its mobile-first, service-heavy reputation and begin producing original Indian IP that competes globally, rather than simply scaling cheap creative labour for studios headquartered in Los Angeles or London. Industry leaders who welcomed the budget announcement were quick to add that the intent was right, but the execution challenge was substantial, pointing specifically to gaps in applied skills, real-time development experience, and familiarity with production-grade tools.
India's studio landscape is weighted toward outsourcing work rather than a product-first approach, and the talent supply from gaming and AVGC programmes has outpaced the number of studios capable of absorbing developers at rates that reflect the value being created. Meanwhile, a booming OTT and VFX sector is quietly pulling mid-level talent away before it reaches senior gaming roles, creating a churn problem within the ecosystem itself.
The Infrastructure Gaps in India
Creative micro, small, and medium enterprises (MSMEs) in India face significant credit shortages because banks hesitate to recognize intellectual property as collateral. Animation studios and game developers often depend on high-interest private credit because the financial system has no framework for IP-backed lending. You can train a generation of talented game designers and animators, but if they cannot access capital to fund original projects, the talent either goes to outsourcing work or leaves the country.
Netflix's decision to launch Eyeline Studios in Hyderabad, making it the fifth location in a global network that includes Los Angeles, Vancouver, Seoul, and London, signals that at least one major global studio regards India as a contributor to high-end digital storytelling pipelines. That is the kind of signal the industry needs to see more of. But it also continues the trend of India joining a global network that someone else built and owns.
Live events, another major component of the orange economy, require 10-15 separate regulatory clearances before they can take place, a bottleneck that has caused several international music festivals planned for early 2026 to be scaled back or cancelled. The Live Entertainment Development Cell, established in July 2025, is working to streamline this and allow for smooth operations.
Lessons From Other Orange Economies
South Korea's Hallyu (“Korean Wave”) was built through sustained public investment and policy coordination, developing a global cultural export ecosystem spanning K-pop, cinema, fashion, beauty products, and food over two decades of deliberate institutional effort. The Ministry of Culture set up training labs, distribution infrastructure, negotiated international partnerships, subsidized content production, and treated the creative industries with the same strategic seriousness that manufacturing had received in an earlier era.
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India has the cultural raw material that South Korea had to build more deliberately. It has twenty-two official languages, thousands of years of storytelling traditions, mythologies that global audiences have barely encountered, a film industry that produces more titles annually than any other country in the world, and a diaspora of over 30M people spread across every major market on Earth. The argument that India can become a cultural export powerhouse is not wishful thinking and is entirely realistic to achieve.
The harder argument, and the one that the budget speeches tend to skip past, is that none of that potential converts to economic value automatically. South Korea did not accidentally export its culture. It made a series of difficult, coordinated, long-term decisions about distribution, IP ownership, and institutional support that took decades to pay off. The shift India needs to make is from being the back office of Hollywood to being a creator of original Indian IP that can be licensed globally.
Tencent's INR 100M ($1.043M) commitment to India’s creative industry is just a piece of the puzzle the country needs to solve. International partnerships that bring platform access, mentorship, and production knowledge into the Indian ecosystem can accelerate what domestic institutions are building. But the question worth sitting with is whose IP gets created, whose platforms distribute it, and whose balance sheet captures the value when it scales.
India is at an early and genuinely promising stage of building a creative economy. The policy intent is there in a way it was not five years ago. What remains unresolved is whether the ecosystem being built will produce Indian-owned creative industries that compete on the global stage, or a well-trained workforce that helps everyone else do it. That is still an open question, and the next five years of execution will go a long way toward answering it.
