Despite its huge population, India is still classed as a tiny territory by international sales agents, one where even the US studios have failed to make much of a dent in the Bollywood juggernaut.
But whereas Indian buyers used to pick up occasional genre films to squeeze in around local product and US tentpole releases, they are now looking for a much wider range of films. They are also better funded and entering into more complex payment terms than ever before.
Over the past few years, Mumbai-based companies including Palador Pictures, UTV and Ndtv Lumiere have been hoovering up what they call 'world cinema' titles, both English and foreign language, ranging from Ingmar Bergman and Federico Fellini classics to the latest Cannes titles.
While the people behind this movement are self-confessed cinephiles, they are also shrewd businessmen who see an opportunity in India's outward-looking urban audiences and fast-expanding multiplex, home video and TV sectors.
The success of video libraries, which rent illegal parallel imports, and strong ticket sales for foreign films at festivals such as the International Film Festival of Kerala and Osian's Cinefan convinced them of the demand.
The non-Indian language movie segment is projected to be worth $349m (rs15bn) by 2009, and media conglomerate UTV believes world cinema could account for about 20%.
Nicole Mackey, executive vice-president - international sales (London) at Fortissimo Films, says she has already done business with UTV and Palador Pictures and is in talks with other buyers which she describes as 'well funded and vertically integrated'.
'There is undoubtedly an economic boom, but also a realisation in the burgeoning middle classes that there is more to cinema than Bollywood and Hollywood,' Mackey says.
'Palador has shown a lot of creativity in releasing theatrically - they have great plans for (Martin) Scorsese's Shine A Light - as well as DVD distribution.'
One of the first companies to join the game, Palador has amassed a catalogue of more than 1,000 titles, some of which have been screened on Indian movie channels or released on DVD in partnership with video distributor Moser Baer.
The company is planning theatrical releases and applying for a licence for a 24-hour TV channel. It is also working with the Swedish embassy to hold a Bergman festival in six Indian cities in July, and with Japanese tech giant Hitachi which is sponsoring an Akira Kurosawa event later in the year.
All of Palador's releases are sub-titled in English, one of India's 23 official languages and the only one that is understood pretty much everywhere in the country. Palador co-founder Gautam Shiknis was one of the first entrepreneurs to recognise the commercial potential in releasing product that India's film-obsessed population had not seen before.
But he says he also has a mission to educate local film-makers and the wider audience.
'Eventually you become what you see and if you're not being exposed to quality cinema, then that will be reflected in the content India produces,' Shiknis says.
He also believes expanding the range of films available in the market could help stamp out the Indian industry practice of rip-offs. Global interest in the Indian film industry as a source of product and financing is at an all-time high.
But an embarrassingly high proportion of local films have their storylines lifted directly from foreign films - and not just Hollywood blockbusters as local producers are looking for good stories rather than recognisable plots.
Bollywood has remade films by directors as diverse as Pedro Almodovar, Park Chan-wook and the Pang brothers, all without acquiring Hindi-language remake rights.
Shiknis believes this habit might decrease if local audiences had access to the originals. But there will be resistance from the mainstream industry.
He says arthouse titles struggle for coverage in the local media which thrives on Bollywood. 'Provoking support for this genre of cinema goes a long way in exposing the rampant plagiarism in Bollywood - so obviously there's a vested interest in keeping it below the radar,' Shiknis says.
UTV, which was initially Palador's partner in its world cinema venture before they disagreed on terms and parted ways, has acquired around 650 titles from sellers such as Fortissimo, Celluloid Dreams and Wild Bunch.
The company's strategy is focused on its 24-hour TV channel, World Movies, which launched in February and is the third-highest rating English- language movie channel behind Star Movies and HBO (all movies are subtitled in English). Theatrical and DVD releases are also planned.
As the channel is aiming for as wide an audience as possible within the English-language segment, it has a slightly different focus to its competitors. 'Our research told us that people would watch a film that had been a box-office success in its country of origin,' says Dilshad Master, COO of UTV Entertainment Television.
'Another factor was films that are contemporary and high on glamour. Bottom of the list was award-winning.'
UTV's focus groups also showed viewers of English-language channels are not impressed by Hollywood stars or international auteurs.
They could only identify a handful of stars, including Brad Pitt, Angelina Jolie and Tom Cruise, and only two out of eight had heard of Scorsese. None of the focus groups recognised any European film-makers, and while they knew the Oscars, they had not heard of the Palme d'Or.
'It became very clear that if we promoted the channel as an auteur film festival, we would be walking down the wrong road,' says Master. 'But they had no problem in reading subtitles. So at the end of the day, the films could be in any language - it was the strength of the story and the emotions that mattered.'
While World Movies is the only world cinema channel on the air, Ndtv Lumiere is gearing up for a launch in August.
A joint venture between broadcaster Ndtv, producer Sunil Doshi and former Adlabs chief Manmohan Shetty, has so far acquired around 400 titles, with Doshi doing the rounds of film festivals and overseeing acquisitions.
The company has also released Spanish horror title The Orphanage and award-winning animation Persepolis in cinemas owned by leading exhibitor PVR, albeit on a small scale of around five prints each.
Doshi says he is interested in 'cutting edge new film-makers' such as Fatih Akin and Nuri Bilge Ceylan, although he has also acquired a small number of classics. He started out by personally acquiring Indian rights to March Of The Penguins, which was released in a version dubbed by Amitabh Bachchan last April.
'It was a moderate hit, but I didn't have the resources to go further, so got in touch with Ndtv and Manmohan Shetty,' Doshi explains. 'We all thought the time was right for such an initiative to be launched in India.'
Doshi sees a growing market for niche product now that home theatre prices are coming down, satellite platforms are mushrooming and more households own a second television.
He also believes India's younger audiences, particularly those with a disposable income who work in IT companies, call centres and business out-sourcing centres, are more open to foreign product.
'They're exposed to the world much faster because of the internet and overseas travel. There are also lots of foreign ex-pats coming in to train them,' Doshi says. 'There are six to eight thousand French people in Mumbai alone.'
But Doshi has found a number of obstacles in securing theatrical releases for foreign films, which is why most of the new players are focusing their efforts on home video and TV.
Although India has around 10,000 screens, there are still only around 1,350 multiplex screens, while the rest are in single-screen theatres not suitable for specialist programming.
World cinema titles also have to compete for screen space with regional-language cinema, including Tamil and Telugu films, which are still not that widely distributed across the country.
More importantly, the government has imposed a 45% customs duty on the cost of the licence fee and materials for imported movies, which some see as an attempt to protect the status quo. Another headache is India's censorship laws which have not been updated since 1957.
The subtitled version of every import has to be cleared by the Central Board of Film Certification (Cbfc), which can be a costly and time-consuming process. Recently Michael Haneke's Funny Games, which Ndtv Lumiere acquired from Celluloid Dreams, was banned outright.
Doshi also describes the cost of p&a materials as 'prohibitively expensive', considering India is a new market and box-office potential is still unknown.
'We're appealing to the sales companies because it's going to be difficult if they don't bring down costs,' says Doshi, who says he has also brought up the issue with France's CNC and other national agencies. 'We're not a developed market for arthouse cinema, so we need a bit of hand-holding in the early stages. We're not in a position to do a release on 25-50 prints.'
Indian distributors will continue to argue this line, because they believe that once the market has been developed, everyone stands to profit. In the meantime, the buyers with the best odds of survival are the larger, vertically integrated companies who can shore up costly theatrical releases with home video and TV.
Smaller independents focused on the theatrical market will find it tough going.
Baba Digital Media, a small US-based distributor, acquired last year's Palme d'Or winner 4 Months, 3 Weeks & 2 Days for release in India, after it opened the International Film Festival of India (Iffi) to packed screenings. But Baba founder Harish Vanjani says he did that more as an experiment than for commercial gain.
'The box office wasn't great, in fact we lost some money, but we believe there is growing interest so it's the start of the process,' Vanjani says. 'The point is that a few years ago, no-one in India would even have considered releasing a Romanian film.'