Maharashtra Unveils Ambitious Policy for India's Creative Economy Boom

What Happened

Maharashtra has officially rolled out its Animation, Visual Effects, Gaming, Comics, and Extended Reality (AVGC-XR) Policy 2025. This move gives the burgeoning sector official industry and infrastructure status, setting the stage for aggressive growth. The state aims to transform its creative landscape, targeting a monumental increase in its AVGC-XR sector from Rs 25,000 crore to Rs 65,000 crore within five years, an annual growth rate of 25 percent. Furthermore, the policy seeks to generate five lakh direct and indirect employment opportunities.

The strategy isn't just about big numbers; it's a statewide vision. Maharashtra plans to foster AVGC-XR growth across all urban tiers, with a particular focus on Tier 2 and Tier 3 cities like Nashik, Nagpur, and Kolhapur. These regions offer lower operational costs and a growing pool of young, educated talent. The policy intends to attract Rs 50,000 crore in investments across the AVGC-XR value chain, establish dedicated parks and centers of excellence, and boost global visibility through international partnerships.

Why It Matters

This policy arrives at a pivotal moment. India’s overall Media & Entertainment market is projected to skyrocket from USD 27 billion in 2024 to over USD 100 billion by 2030. Rapid smartphone adoption, high-speed internet, and the OTT streaming boom fuel an insatiable demand for quality digital content. Technology convergence, integrating machine-learning tools, virtual production, and blockchain, is also redefining creative processes and unlocking new revenue streams across gaming and immersive storytelling.

Maharashtra is already a significant player, hosting over 30 percent of India's AVGC-XR studios and 20 universities focused on creative education in hubs like Mumbai and Pune. Designating AVGC-XR as a 'sunrise industry' under its IT & ITeS Policy 2023 underscores the state's intent. The policy seeks to shift Maharashtra from being primarily a services hub to a content leadership position, developing its own intellectual property (IP) and boosting exports. This strategic pivot could fundamentally alter India’s position in the global creative economy, moving beyond mere outsourcing.

Our Take

Maharashtra's AVGC-XR Policy 2025 is undoubtedly ambitious, recognizing the immense potential of the digital content space. Granting industry status provides crucial legitimacy and access to incentives, a smart play for a sector often overlooked by traditional economic frameworks. The emphasis on Tier 2 and Tier 3 cities is also a shrewd move. It leverages lower costs and untapped talent pools, potentially fostering distributed growth rather than concentrating everything in already saturated metros. This decentralization could create more resilient and diverse creative ecosystems.

However, the execution of this decentralized model will be key. While smaller cities offer cost benefits, attracting and retaining top-tier creative talent often requires more than just a lower cost of living. Access to world-class infrastructure, collaborative networks, and continuous upskilling opportunities must be robust in these emerging clusters. Furthermore, transitioning from a service provider to a global IP creator is a significant leap. Building and monetizing original content that resonates internationally requires sustained investment, a strong legal framework for IP protection, and a deep understanding of global market trends—challenges that extend beyond mere policy incentives. The commitment to review the policy every two years is a double-edged sword; while it allows for adaptability, frequent changes could introduce uncertainty for long-term investors.

Implications for the Future

If successful, this policy could solidify Maharashtra's position as a global creative powerhouse, driving innovation and attracting significant foreign direct investment. It promises not just jobs, but high-skill, future-proof roles in a rapidly evolving digital landscape. For businesses, the incentives for setting up AVGC-XR units, particularly in developing regions, present compelling opportunities for expansion. For India, it’s a clear signal of intent to capture a larger share of the global creative economy, moving up the value chain from back-office support to front-end content creation. The next five years will truly test Maharashtra's resolve to turn this vision into reality, but the framework is now firmly in place.