One of the world's most crowded and at times dysfunctional cities, shooting in Mumbai is not for the faint-hearted. But it is also the centre of one of the world's largest film industries, with production costs around one-fifth of those in the West. For projects with a story set in Mumbai, filming in the Indian mega-city is not an insurmountable task.

Celador and Film4's $15m Slumdog Millionaire, which Danny Boyle is shooting until February 10 in and around Mumbai, is loosely adapted from Vikas Swarup's novel Q&A, about a former slum child who, in an attempt to contact a long-lost sweetheart, appears on and wins the Indian version of Who Wants To Be A Millionaire.

Although London-based Film4 head Tessa Ross, who originally optioned the book, and Celador co-managing director Christian Colson found the story irresistible, the project presented challenges when it came to casting and locations.

Scripting and financing proved relatively easy. Simon Beaufoy (The Full Monty) was called in to adapt the novel, and Ross approached Celador, partly because the UK production outfit owned the rights to the game show, but also because they were a suitable production partner and could bring in finance. "Usually we option material with a producer already attached, but we just loved this book," explains Ross.

However, casting the three main characters - who are portrayed at the ages of six, 12 and 18 - was not so easy. Casting director Loveleen Tandan, who has also worked on Brick Lane and Monsoon Wedding, had to find three actors of different ages for each character, the oldest of which had to speak English as well as Hindi. "Danny wants the film to be realistic, so part of the dialogue is in Hindi, though it's not totally foreign language, which would marginalise it," Colson explains. The process took months but Tandan finally found a mixture of actors and non-professionals, including two six-year-olds who live in the slums. As Boyle does not speak Hindi, Tandan's role evolved into that of co-director.

The production team also had to find a range of locations on the crowded streets of Mumbai, and in the Dharavi slum, which is home to more than a million people. The script also called for a set-piece with thousands of extras in the Chhatrapati Shivaji Terminus, through which 2.5 million commuters pass every day.

The process of location scouting took months. Although India is attracting an increasing number of foreign shoots, and the government has been trying to ease their progress, it still presents major challenges. One of the biggest is the local media excitement and public curiosity that foreign productions generate. Michael Winterbottom's A Mighty Heart fell foul of this when the production was mobbed by onlookers and scuffles broke out between security personnel and members of the public. It is understood the media frenzy surrounding that production gave the producers of Mira Nair's Shantaram second thoughts about shooting in India, even before the writers' strike put the project on hold.

Slumdog was less at risk, as it does not have big stars, but it still attracted attention. "You look up and there are 150 faces peering from the tops of buildings that seem to come from nowhere," says Boyle. "It can be very overwhelming, but that's India and you just have to go with it."

His experience on The Beach means Boyle is no stranger to shooting in exotic locations - and dealing with the resulting negative local publicity. However, with Slumdog, he is taking a more grassroots approach, shooting an Indian film with an Indian cast and crew. "I much prefer this experience of shooting real people in the centre of a big, intense city," says Boyle.

According to Colson, the key to shooting in Mumbai - or indeed anywhere in India - is to find an experienced local production services company, and give yourself plenty of time to prepare. "People say it's difficult to shoot here but the truth is that it's a film-making centre and they have fantastic crews," says Colson, who points out the production only brought in a few heads of department from the UK. "There's a lot of red tape, but the line producer has helped us through all that. It just takes time."

As India lacks film commissions, a local fixer is essential to help foreign crews past Indian bureaucracy and private opportunism. The line producer on Slumdog, India Take One Productions, has worked on films such as Alexander and Holy Smoke. "Five years ago, India didn't have call sheets and people knew nothing about scheduling and budgeting, but everything is changing," says Take One's Tabrez Noorani.

However, he cautions that cost savings depend on how you shoot. "The Indian style is ridiculously cheap, but then we don't use things like production trailers or a canteen," says Noorani. "The other thing to remember is that real estate and hotels in Bombay are not cheap."

But India has other attractions in addition to low costs, such as stunning locations, well-equipped studios and post-production expertise. And it looks likely Boyle's experiences will help reverse doubts and encourage other overseas film-makers to return to the country.