When the Cartoon Network channel launched in India more than a decade ago, it simply dubbed its shows in regional languages.

But it soon realised there was a market for local content and tapped Indian animation firms for shows such as "Krishna Balarama" on a Hindu god and "Tenali Raman", a popular folk hero who was a 16th century court jester.

Last year, parent Turner International, in a maiden effort, set up a multi-million dollar unit in India to develop and produce animated films and original live action TV series.

"The opportunity in developing local animation content is significant," said Samir Patil, chief executive of ACK Media, which was recently commissioned by Turner to produce two animated films and a TV series based on popular Indian folk tales and mythology from the Amar Chitra Katha comic books.

The animation industry in India, including entertainment, visual effects and gaming, is estimated at about $500 million and forecast to double by 2012, according to financial services firm Ernst & Young. The entertainment segment is likely to grow at 18 percent annually.

Animation in India, driven by lower costs and software expertise, was largely limited to low-end work such as title credits, special effects and brushing up of scenes created in Hollywood studios. Original work was rare or of poor quality.

"None of the studios were innovative enough to produce their own content. The mentality was Hollywood-centric because that is where the money was," said Avi Sidhu, a partner in Virtual Realms Productions, which is making a film on Rajput king Ranjit Singh.

But with local content ruling television and the big screen, studios soon began looking at local content for animation, too.

The economic meltdown turned the tap off some Hollywood projects and made Indian firms realise they need to diversify their risk, plus there was a growing realisation in India about the value of creating intellectual properties, Patil said.

"We have such a long artistic tradition and history of story-telling," said Patil, whose brightly-coloured ACK comics are immensely popular with kids for learning about Indian mythology and the pantheon of gods of the Hindu religion.

Recognition

Recently, studios have also turned to contemporary themes to target an older audience. Last year, Walt Disney co-produced 'Roadside Romeo', an animated flick about an abandoned dog finding true love, with India's Yashraj Films.

"We were stuck in mythology, but with this we knew local characters and storylines can be created and that they do work," said Farrokh Balsara, head of Ernst & Young's entertainment practice, adding that more than two dozen animation films based on local content are in various stages of production in India.

Foreign studios including Sony (6758.T: Quote, Profile, Research) and Disney, besides UTV Motion Pictures, Adlabs (ADLF.BO: Quote, Profile, Research) and Big Screen Entertainment have either produced or announced the start of production of animation films with budgets of $2.5-$3.3 million, about half the budget of an average Bollywood film.

But animation in India is still hamstrung by a belief that it is for children, and the reluctance to earmark big budgets: a 30-minute animated TV show in the United States has a budget of about $250,000, while in India it is one-eighth of that.

"No Indian studio can focus 100 percent on the domestic market because the money's just not there. The money's in Hollywood, however low-end," said Sidhu, who decided to make a short animated film on his own instead of chasing after studios.

It paid off: 'Eyes of Silence' has won five international awards, including Best Animation at the Rockport Film Festival. Sidhu is now signing deals with companies in Malaysia and Canada.

"So many Indian animation studios make the mistake of hankering after big Hollywood studios. The ideal would be to create your own content and then look for work elsewhere."