Maharashtra’s AVGC-XR Policy 2025 out: Here’s what it means for India’s creative economy

The Maharashtra government had earlier approved the animation, visual effects, gaming, comics and extended reality (AVGC-XR) Policy 2025 for the state in September. The policy that gives the AVGC-XR the status of an industry and infrastructure sector is finally out.

As per the policy, India is poised to become a major global player. The country’s M&E market is projected to grow from USD 27 billion  in 2024 to over USD 100 billion by 2030, generating over 30 lakh direct jobs and 51.5 lakh indirect jobs by 2030.

Maharashtra hosts over 295 AVGC-XR studios, accounting for more than 30 per cent of India’s total AVGC-XR studios. Mumbai and Pune have emerged as AVGC-XR education hubs, with 20 universities dedicated to animation, visual effects, and gaming. Recognising this growth potential, Maharashtra has designated AVGC-XR as a sunrise industry under the IT & ITeS Policy 2023, positioning itself as a national hub for AVGC-XR innovation, investment, and talent development. 

Here are the policy highlights:

The state’s AVGC-XR Policy aims to deepen Maharashtra’s participation in the global creative economy by incentivising foreign direct investment, strengthening lP development, and supporting export-oriented creative enterprises. By investing in world-class institutions, integrated production clusters, and digital enablers, Maharashtra seeks to move up the value chain-from services to content leadership-positioning itself as a globally competitive, innovation-driven hub for creative industries. 

The state’s existing infrastructure of world-class studios and pioneering institutions, highlights its substantial contribution to India’s AVCC-XR exports, and is official recognition as a sunrise industry under the IT & ITeS Policy 2023. Maharashtra is uniquely positioned to capitalise on these trends through the following key growth drivers: 

• Rising Demand for Digital Content: Rapid smartphone adoption, high-speed internet, and the OTT boom have driven strong demand for high-quality animation, VFX, and gaming content across demographics.
• Technology Convergence (AI, XR, Web3): Integration of AI, virtual production, blockchain, and metaverse platforms is transforming creative processes, unlocking new opportunities and revenue streams in gaming, digital assets, and immersive storytelling.
• Policy & Infrastructure Support: Central and state initiatives like Digital India, Startup India, and Make in India align to promote digital creative industries. Maharashtra’s upcoming AVGC-XR hubs and parks will offer world-class infrastructure to boost innovation and growth.
• Youth Demographics & Skilling: With over 65 per cent of Indians under 35, demand for interactive content is rising. Expanding AVGC-focused education and training programs are building a strong talent pipeline.
• Export & IP Opportunities: Competitive talent costs and efficient remote workflows make Maharashtra-based studios attractive for global outsourcing, fostering IP creation, licensing, and monetisation internationally.
• Maharashtra at Waves- Global Innovation Showcase: At Waves, Maharashtra will highlight its advanced infrastructure, thriving startups, and policy-driven support through immersive exhibits and networking, reinforcing its vision to become India’s AVGC-XR capital.

This policy strategically recognises and actively promotes the immense opportunities for AVGC-XR growth and development across Maharashtra’s tier two and tier three. Maharashtra’s AVGC-XR Policy 2025 already identifies cities like Nagpur, Nashik, Chhatrapati Sambhajinagar, Kolhapur, and Satara as potential regional AVGC clusters. Key opportunities driving this expansion include:  

• Cost-Effective Business Environment & Economic Growth: Tier two and tier three cities offer lower real estate and operational costs, along with competitive talent markets. These advantages attract investments, boost local entrepreneurship, and generate employment, making them ideal for new and expanding AVGC-XR ventures.
• Abundant and Skilled Workforce: Cities such as Nashik, Nagpur, Chhatrapati Sambhajinagar, and Kolhapur host a growing base of young, educated, and adaptable talent. Expanding educational and vocational training programs, supported by strong digital infrastructure, ensure a steady supply of skilled professionals for the industry.
• Strong Infrastructure & Digital Connectivity: Government investments in high-speed internet, reliable power, and transport networks are enhancing these regions’ readiness for high-tech industries. This infrastructure supports seamless operations for AVGC-XR businesses, enabling efficiency across remote and hybrid models.
• Growing Access to Capital and Innovation: Rising investor interest in emerging cities, supported by better digital connectivity and technological readiness, is creating fertile ground for startups and local innovation.
• Enhanced Quality of Life and Cultural Richness: Lower living costs, better work-life balance, and vibrant local cultures make these cities attractive to talent while inspiring original content and a unique creative identity.
• Expanding Domestic Market: A growing middle class with higher disposable income is driving demand for digital entertainment, boosting local markets for AVGC-XR products and indigenous content.
• Statewide Strategic Vision: Maharashtra is promoting AVGC-XR growth across all urban tiers to build a diversified, resilient ecosystem that attracts investment, nurtures talent, and ensures inclusive economic development statewide.

The vision of the policy is to position Maharashtra as a premier destination for AVGC-XR sector by driving innovation,  attracting investments, and fostering intellectual property creation. Leveraging the state’s rich cultural heritage, the policy aims to develop a world-class, inclusive ecosystem by nurturing talent, establishing centers of excellence, and advancing skilling initiatives. 

Here are the objectives of the policy:

• Expand the AVGC-XR sector in Maharashtra from around Rs 25,000 Cr. to Rs 65,000 Cr. in the next five years, targeting an annual growth rate of 25 per cent. 
• Increase the state’s share in the national AVGC-XR sector from 20 to 25  per cent, making Maharashtra a leading creative economy hub. 
• Attract investments worth Rs 50,000 crore which shall be across AVGC-XR value chain.  
• Generate five lakh employment (direct + indirect) opportunities by supporting skilling, upskilling, and entrepreneurship.  
• Promote IP creation and enhance global visibility through international co-productions, exports, and strategic partnerships. 
• Establish AVGC-XR parks, centres of excellence, and virtual studios to support innovation, research, and production excellences

The policy will be valid for five years or till the new policy announcement, whichever is earlier. The policy will be reviewed and updated periodically (at least every two years) to ensure its continued relevance and effectiveness. This review process will involve consultations with industry stakeholders, academic experts and government agencies. Any modifications or amendments to this policy will be made in accordance with established legal and administrative procedures.  

Eligible entities having units registered in Maharashtra for various incentives offered under Maharashtra AVGC-XR Policy 2025: An eligible unit means any industrial enterprise/business, constituted as a company- including private, co-operation, public, trust, LLP, or joint undertaking, setting up an AVGC-XR Unit. This unit shall commonly be referred to as ‘AVGC-XR unit’ or ‘unit’ in the AVGC-XR sector. 

To know about the policy in detail, click here: Maharashtra AVGC-XR Policy 2025