India’s Budget 2026 has renewed focus on the AVGC sector, positioning it as a growth engine. However, gaps in funding access, skills, and global integration threaten execution.
Animation, visual effects, gaming, and comics — collectively AVGC — once again found a place in India’s Budget 2026 narrative. The sector is framed as a creative-tech hybrid capable of exports, job creation, and cultural influence.
But recognition alone has not historically translated into scale.
Why AVGC keeps returning to the policy agenda
India has long had pockets of excellence in animation and VFX, often as outsourced back-end partners for global studios. What policymakers want now is value capture — IP creation, original franchises, and global distribution.
The Budget’s emphasis reflects three realities:
- Global gaming and digital media revenues continue to grow
- AI tools are lowering entry barriers for content creation
- Cultural exports are increasingly strategic assets
Yet the gap between intent and outcome remains wide.
Where execution breaks down
AVGC startups struggle with structural issues:
- Limited access to growth capital
- Weak domestic publishing and distribution
- Fragmented skill development pipelines
Unlike fintech or SaaS, AVGC businesses need long gestation periods before monetisation. That makes them a poor fit for India’s venture capital preferences, which still favor fast revenue visibility.
Policy announcements without funding mechanisms risk repeating past cycles of enthusiasm followed by stagnation.
The global competition problem
Countries like South Korea, Canada, and parts of Europe actively subsidise AVGC through tax credits, production rebates, and co-production treaties.
India’s cost advantage is narrowing as wages rise. Without predictable incentives and export support, global studios may continue to use India tactically rather than strategically.
The opportunity is real. The execution risk is higher.
