It seems that the government wants to push India’s animation, visual effects, gaming and comics (AVGC) sector further into the policy mainstream. What remains unclear is whether this intent will translate into durable economic outcomes for the industry.
By committing to set up AVGC content-creator labs in 15,000 secondary schools and 500 colleges, and by projecting a demand for 2 Mn professionals by 2030, finance minister Nirmala Sitharaman, during her 2026 Budget speech, positioned the creative economy not as a soft-power add-on, but as a pillar of national infrastructure.
“India’s AVGC sector is a growing industry, projected to require 2 Mn professionals by 2030. I propose to support the Indian Institute of Creative Technologies, Mumbai in setting up AVGC Content Creator Labs in 15,000 secondary schools and 500 colleges,” Sitharaman said on February 1.
The Budget places AVGC alongside design, manufacturing-linked skills, and institutional capacity-building, hinting at a broader ambition to turn cultural production into an economic engine.
Yet, for an industry that has heard similar promises before, optimism seems cautious. Imperative to mention that the focus on the AVGC space has come in previous budgets, task forces, and policy notes, most notably the AVGC Task Force in 2022, without triggering the structural transformation the sector has long demanded.
Training initiatives were announced, centres of excellence were proposed, and global ambitions were articulated. What rarely followed was capital depth, IP incentives, or studio-level economic reform.
“From an industry perspective, this is one of the most supportive budgets the AVGC sector has seen. The media and entertainment sector has historically received limited attention in Union Budgets, so this level of policy recognition matters,” said Ananay Jain, partner and national M&E leader, Grant Thornton Bharat LLP.
Talent Pipeline Ambition Vs Execution Reality
Training 2 Mn AVGC professionals by 2030 is an unprecedented ambition, not just for India but globally. No other major creative economy has attempted a workforce expansion at this scale through public policy alone. The government’s proposal to embed AVGC labs across schools and colleges effectively seeks to industrialise creative education.
“The projection of 2 Mn professionals required by 2030 highlights both the scale of the opportunity and the responsibility on industry and institutions to prepare future-ready talent,” said Animesh Agarwal, the founder and CEO of S8UL Esports and 8Bit Creatives.
On paper, the logic is compelling. India already supplies a significant portion of the world’s animation and VFX manpower. Global studios routinely outsource post-production, compositing, and effects work to Indian vendors. Gaming studios rely heavily on Indian developers, artists, and testers. Scaling the pipeline appears to be a rational response to rising global demand.
But industry analysts point out that AVGC is not a linear skill industry. Unlike traditional vocational sectors, employability depends less on certification and more on portfolio quality, tool familiarity, narrative sensibility, and exposure to production pipelines.
“Training numbers look impressive in policy documents. But unless students are working on real production pipelines, using industry-grade tools, and learning under people who have shipped global content, the market will not absorb them,” said a senior VFX studio executive.
Curriculum relevance remains another unresolved concern.
AVGC tools, workflows, and platforms evolve rapidly. A syllabus designed today can become obsolete within two years. Without a continuous feedback loop with live studios, OTT platforms, gaming publishers, and global distributors, school- and college-based labs risk teaching yesterday’s skills to tomorrow’s workforce.
Akshat Rathee, cofounder and managing director, Nodwin Gaming, said the proposed labs should be viewed as long-term infrastructure rather than a quick fix. “These labs are a foundational ‘try-and-build’ layer at the school and college level. We’ve seen this model work, but only over time. The outcomes won’t show up in two years.”
IICT Mumbai: Hub-And-Spoke Or Symbolic Centres?
At the institutional level, Budget 2026 renews focus on the Indian Institute of Creative Technologies (IICT), Mumbai, positioning it as a central node in India’s AVGC push. Alongside the proposed National Centre of Excellence (NCoE) for AVGC-XR, the government appears to be experimenting with a hub-and-spoke model — centralising excellence while decentralising access.
The idea is sound. Countries that dominate global creative industries, such as South Korea, Japan, and France, have relied heavily on anchor institutions that combine education, research, incubation, and IP creation. These hubs serve not just as training centres but as creative accelerators, where ideas are commercialised and talent clusters emerge.
However, whether IICT evolves into such an institution remains an open question.
So far, India’s creative institutes have largely functioned as training bodies, not IP engines. They produce skilled professionals, many of whom go on to work for global firms, but rarely generate proprietary content, original franchises, or globally monetisable IP.
Industry stakeholders will be watching closely to see whether IICT Mumbai can break this pattern. Will it house production-grade studios, seed funds for original IP, and partnerships with global distributors? Or will it remain another symbolic centre, strong on intent but weak on commercial spillover?
IP Creation Still The Missing Economic Lever
If there is one issue on which the AVGC industry speaks with near-unanimity, it is that India lacks a coherent economic framework for original IP creation. Budget 2026, while ambitious on training and institutions, offers no direct incentives for IP creation.
There are no targeted tax benefits for original content studios, no grant frameworks for early stage IP development, no reduction in TDS burdens on digital platforms, and no distribution-linked incentives for Indian-origin content.
“Skill alone doesn’t create IP. You need patient capital, tax certainty, and distribution support. Otherwise, studios will keep choosing predictable outsourcing revenue over risky original projects,” a gaming studio founder said.
Countries that have successfully built creative IP ecosystems, such as Canada in animation or South Korea in gaming, have relied heavily on public funding, tax credits, and export support. India, by contrast, has focussed primarily on manpower supply.
Funding Clarity Pending
Budget 2026 does not emerge in isolation. It builds on earlier initiatives: the AVGC Task Force (2022), the proposed National AVGC Mission, and approvals for Centres of Excellence in XR and digital media.
Taken together, these moves suggest policy continuity, not a one-off announcement. The government appears committed to keeping AVGC on the policy agenda.
What remains missing, however, is budgetary specificity.
There is no clearly earmarked outlay for AVGC labs, no multi-year funding roadmap for IICT, and no transparent allocation for IP or studio support. Without these details, industry confidence remains tentative.
Earlier AVGC announcements generated initial excitement but stalled at the implementation stage due to fragmented funding and inter-ministerial coordination challenges.
If Budget 2026 follows the same trajectory, strong vision, weak fiscal backing, the risk is policy fatigue within the industry.
