India’s AVGC Policies: How States Compare to the National Vision

India’s AVGC policies are finally catching up with the industry's pace. However, when you line up what states are doing against what the Union government says should happen, a clear pattern emerges: a lack of coherence and execution in some cases. The next phase of India’s AVGC story will be defined less by the number of policies that exist and more by whether they can coexist and benefit the industry. 

India: A Sunrise Sector With a Patchwork Policy Map

The AVGC-XR Promotion Task Force, set up by the Ministry of Information & Broadcasting in 2022, projected that India’s animation, VFX, gaming, comics and extended reality sector could create around 20 lakh direct and indirect jobs over the next decade, and recommended a National AVGC-XR Mission with a “Create in India” focus.

Since then, a set of states, including Karnataka, Telangana, Kerala, Maharashtra, and now Tamil Nadu, have either adopted or announced AVGC-specific policies. But these efforts are evolving in silos, often with different definitions, incentive structures, and institutional frameworks. 

New Delhi’s AVGC-XR Task Force and the Model State Policy lay out a basic blueprint for how India wants its AVGC ecosystem to grow. The plan starts with a strong institutional setup: each state should have a dedicated AVGC-XR nodal agency, public–private Centers of Excellence, and a single-window system to make permissions and incentives easier to access. 

On the education side, the national guidelines call for AVGC subjects to be built into school and college courses under NEP 2020, backed by standardized curricula, vocational pathways, and certification systems created with the Media and Entertainment Skills Council. The Center also recommends developing infrastructure such as AVGC parks, clusters, and shared facilities like render farms and mocap studios.

The national framework also focuses on funding and regulation. It encourages states to offer production grants, IP creation support, tax benefits, export promotion, and easier access to credit through venture or seed funds.

At the same time, it highlights the need for responsible rules around online gaming, child rights, data protection, regional-language IP, and anti-piracy measures, in line with reforms like the Cinematograph (Amendment) Act, 2023. Overall, the template aims to give investors clarity and ensure that studios operating in multiple states don’t face completely different rules each time.

What States Have Actually Done

Here is a look at what each state has done so far: 

Karnataka: The First Mover

Karnataka’s 2017–2022 AVGC policy was the country’s earliest comprehensive attempt to treat AVGC as a distinct industry. It aimed to make the state “the most favored destination” for AVGC investment and backed that ambition with:

• A Centre of Excellence (CoE) in Bengaluru on a PPP model, with an estimated capital outlay of ₹80 crore ($8.94M) split between the state, Center, and industry.
• A Finishing Academy-cum-incubation centre, explicitly designed to create “industry-ready professionals”.
• AVGC parks, land earmarked in SEZs and the ITIR near the airport, and a venture capital fund of ₹50 crore ($5.59M) for AVGC entrepreneurs.

Karnataka’s policy ticks many boxes from the Model State Policy, including CoE, venture funding, infrastructure, and skilling. The challenge now is not design but refresh and scale. The 2017–22 framework needs an updated follow-through to keep pace with a sector that has moved from outsourcing work to IP-led projects.

Telangana: IMAGE Policy

Telangana’s IMAGE Policy (2016) and subsequent initiatives positioned Hyderabad as a global outsourcing and production base. The policy explicitly sought to:

• Make Hyderabad “the most favored destination for investment” in AVGC.
• Build IMAGE City, a Center of Excellence with state-of-the-art facilities.
• Address long-standing bottlenecks such as piracy, lack of funding, poor infrastructure, and payment friction in gaming.

The Telangana model is infrastructure-heavy, aligning well with the national blueprint on physical ecosystems, but less detailed about sustained funding models for original Indian IP. It is currently a hub for major international studios like Electronic Arts (PopCap Studios) and Rockstar Games. 

Kerala: A Draft Policy With Clear Targets

Kerala’s AVGC-XR Policy 2024–2029 (Draft) combines cultural soft power with tech ambition. It frames AVGC within Kerala’s broader art, literature, and cinema heritage, while setting numerical targets like 50K jobs and at least 250 establishments by 2029.

Key features of the policy include:

• Heavy integration with state agencies like the Kerala Startup Mission, Kerala State Industrial Development Corporation (KSIDC), and Kerala Digital University.
• Emphasis on capturing and digitally preserving local art forms, folklore, and heritage.
• Positioning Kerala as a global AVGC hub built on both technology and culture.

Kerala adheres closely to the national emphasis on regional IP and soft power, but will need to show how quickly these ambitions convert into investible projects and export-ready studios.

Maharashtra: Big Money, Long Horizon

Maharashtra’s newly approved AVGC-XR Policy 2025 is arguably the most financially aggressive. The state cabinet has cleared a plan aimed at generating two lakh jobs and attracting ₹50K crore ($5.59B) in investments by 2050, with an initial allocation of ₹3,268 crore ($365.4M). Highlights include:

• AVGC-XR parks with world-class infrastructure in Mumbai, Pune, Nagpur, Nashik, and other cities.
• AVGC-XR activities are recognised as essential services with 24/7 operations.
• A dedicated Skill Advisory Committee with industry and academia representation.

This aligns strongly with the national push for CoEs, large-scale skilling and export competitiveness. 

Tamil Nadu: A Policy Taking Shape

Tamil Nadu’s AVGC-XR policy has outlined a framework built on four pillars: education and skilling, infrastructure, ease of doing business, and financial incentives.

Key elements reported so far include:

• A Center of Excellence in Chennai and an AVGC-XR “Bridge” to act as a B2B marketplace.
• Integration of game design, programming, and animation into school and college curricula.
• A facilitation cell in ELCOT and targeted subsidies for AVGC firms and startups.

In terms of design, Tamil Nadu is closest to the national ideal of embedding AVGC into mainstream education, but the specifics of funding volume, incentive structure, and regulatory stance on gaming are yet to be tested in practice.

Nagaland: Task Force and Early Regulatory Clarity

Nagaland has recently positioned itself as a rising participant in India’s AVGC-XR landscape, focusing on task-force-led policy development and grassroots talent building. In 2025, the state constituted a dedicated AVGC-XR task force to shape incentives, ecosystem planning, and sectoral governance.

Nagaland has also leaned into esports visibility through participation in national events such as the Khelo India Youth Games 2025, signalling official recognition of gaming as part of its digital economy goals. Other highlights include:

• Early institutional push through a 2025 AVGC-XR task force, aimed at drafting state-level policies, coordinating incentives, and building ecosystem infrastructure.
• Skill-building workshops and incubation support, delivered with partners such as CII and through industry-led programmes like KRAFTON’s India Incubation initiative, giving young developers access to training and mentorship.
• A pre-existing legal framework distinguishing skill-based gaming from games of chance, providing regulatory clarity for esports and casual game developers. 

Nagaland’s approach is still emerging, but its mix of youth-focused initiatives, incubation support, and regulatory groundwork positions it as a promising digital innovation hub in Northeast India.

Where States Align With the National Template

Across these states, there is a clear convergence with the Union blueprint on a few fronts:

Centers of Excellence and Clusters: Karnataka’s CoE, Telangana’s IMAGE City, Kerala’s AVGC-XR plan, Maharashtra’s multi-city parks, and Tamil Nadu’s proposed CoE all track with the Task Force’s recommendation for dedicated hubs. 

Talent and Skilling: Whether through finishing schools (Karnataka), IMAGE-linked programmes (Telangana), Kerala’s academic partnerships, IICT in Mumbai, or Tamil Nadu’s curriculum integration, states have embraced skilling as a core plank.

Recognition of AVGC as a Strategic Sector: National communication now explicitly calls AVGC-XR a key driver of India’s creative economy, and state policies echo that language.

Where the Policies Fall Short

Fragmented Incentives: India’s AVGC push looks strong on paper, but once you move from policy design to on-ground delivery, several weaknesses become clear. The first is fragmented incentives and a lack of interoperability. Every state defines eligibility, benefits, and approval mechanisms differently. 

Karnataka emphasises a VC fund, Maharashtra leans on heavy long-term capital investment, Telangana ties incentives to IMAGE City, Kerala favors academic integration, and Tamil Nadu is still detailing its subsidy structure. For studios operating across multiple regions, this creates friction and uncertainty.

Although the national Model State Policy recommends alignment, India still lacks a single, interoperable portal that brings state incentives under one framework.

Funding: The second gap is funding clarity. The central Task Force explicitly calls for production grants, IP funding, and easier access to risk capital. Yet, most state policies remain vague. Karnataka’s venture fund is not regularly updated, Maharashtra and Kerala announced their targets without clear grant or milestone-based schemes, and Tamil Nadu’s draft emphasizes infrastructure more than early-stage financial support.

What’s missing are transparent, time-bound grant structures, public dashboards showing disbursements, and tighter linkage with national programmes such as Start-Up India.

Regulation: A third area of concern is the regulatory silence around online gaming and esports. While the Centre, through PIB and the Task Force, acknowledges the importance of fair monetization, player protection, and esports governance, and the Online Gaming Bill has helped separate gaming from real-money gaming (RMG), there is no regulation around age ratings, loot box rules, or GST implications.

As national guidelines continue to evolve, this ambiguity increases compliance risks for developers and investors who want to work with Indian talent. 

Skilling: The fourth gap lies in skilling, where states show enthusiasm but lack coordination. Although every major AVGC state mentions training, there is no unified National AVGC Skill Grid that connects school exposure, higher-education programmes, and short-term vocational training.

The Task Force and Media and Entertainment Skills Council (MESC) have already created competency frameworks, but adoption is inconsistent. Without common credits or portable certifications, students trained in one state may not meet industry requirements in another.

AVGC policies across India suffer from fuzzy KPIs and weak measurement systems. Kerala sets explicit job and establishment targets, and Maharashtra outlines job creation and investment goals, but most states stop at headline numbers. Few define how success will be measured beyond capex and employment.

Metrics for IP creation, co-production deals, export growth, or MSME survival rates don’t exist, making it difficult to track real outcomes. Without independent evaluation and transparent reporting, India risks making ambitious policy announcements without any follow-through. 

What Needs to Change? 

When you look beyond individual state policies, three clear priorities emerge for India’s AVGC ecosystem. The first is the shift from patchwork to policy architecture. At present, states are building their own frameworks with little coordination. The National AVGC-XR Mission needs to evolve from issuing broad guidance to actively harmonizing definitions, incentives, and compliance requirements, so policies complement each other instead of competing or contradicting one another.

The second priority is moving from announcements to actual pipelines. States frequently announce Centers of Excellence, AVGC parks, and innovation clusters, but these projects are rarely linked to measurable outcomes. To be effective, each hub should track pipeline metrics such as the number of projects incubated, IPs created, export deals closed, and studios that successfully scale. Without this, infrastructure risks becoming symbolic rather than productive.

The third shift involves going from sector-specific thinking to ecosystem thinking. AVGC does not exist in isolation. It intersects with broadcasting reforms, anti-piracy law, startup financing schemes, digital education frameworks, and India’s emerging approach to regulating online gaming. The Union government’s recent moves, such as setting up the Indian Institute of Creative Technologies (IICT) and the National Centre of Excellence in Animation, VFX, and Gaming in Mumbai, are steps in the right direction. But for these reforms to have an impact, states must be fully aligned with and integrated into this national network.

The next phase of India’s AVGC journey will depend on whether these policies connect, communicate, and reinforce each other. National guidance and state-level experimentation have to be stitched into a unified architecture with clear definitions, shared standards, and measurable outcomes. India has the potential to move beyond being a cost-efficient outsourcing base. It can become a genuine source of original, globally competitive IP in animation, gaming, VFX, and immersive media.