India 's film industry is expected to more than double in value in the next five years, according to PricewaterhouseCoopers. The business will be worth $4.1bn (rup175bn) by 2011, compared to the $2bn (rup84.5bn) it was worth in 2006, according to the report presented at this week's Ficci-Frames conference in Mumbai.

The Indian box office, which was worth $1.5bn (rup64bn) in 2006, is projected to grow to $2.8bn (rup119bn) by 2011, while home video revenues will grow from $151m (rup6.5bn) to $579m (rup25bn).

Factors contributing to growth include corporatisation of the Indian film industry, the multiplex boom and growth of digital cinema, improved models for financing films and increased marketing spends.

Over the past two years, an increasing number of Indian film and entertainment companies have been launching IPOs or attracting private equity, a trend that is expected to continue in the next five years. In 2006, production house Percept Picture Company received funding from Indian media giant Bennett, Coleman & Co while e-cinema provider UFO Moviez received funding from private equity player 3i.

Meanwhile, the number of multiplex screens owned by the five major exhibitors - PVR, Inox, Cinemax, Shringar and Adlabs - is expected to increase from 193 to around 907 in the next five years.

The report also predicted the international market for Indian films, which is worth $162m (rup7bn), will grow at a compound annual growth rate of 18% compared to local box office growth of 16%.

The international dimension is at the heart of the debate on the future of Indian cinema. Investment from overseas has been pouring into the country which has become increasingly less insular in its outlook.

The report puts overseas investment in India's creative industries at more than $890m in 2006. Some 13 Foreign Direct Investment proposals were approved by the government last year with an additional 22 proposals in the pipeline.

Indian film, and particularly Bollywood, has a strong following around the world, particularly with the Indian diaspora in places like the UK and US. And there is increasing interest in film that crosses boundaries.

This week Indian entertainment conglomerate UTV and film-maker Rakeysh Mehra's company Rakeysh Omprakash Mehra Productions (Romp) announced a three-year four-film partnership with particular interest in international sales.

Among the films will be Mehra's M, the first of a trilogy with a clear global focus. Screenwriting guru Syd Field is said to be collaborating on the project.

The aim is to tap foreign markets for about 50% of the revenue. Mehra said, "The films will be made for movie audiences globally, not just for India or the West." UTV and Romp are also in talks with US studios such as Disney, Fox and Sony for global partnerships on this slate.

Bollywood itself has become a big international business in its own right. In a bid to bring exotic new settings to Indian audiences, and to cater for the large, global non-resident Indian market, Indian producers are increasingly looking to shoot overseas and incorporate international stories and locales into their films.

And they are finding themselves courted by foreign governments. Bollywood production is worth more than $40m annually to the UK and, with spend set to rise further, the country is attempting to position itself as a major host of Indian production.

Progress is not without its difficulties, however. India, for example, is facing tough questions about digital cinema on which many hopes are being placed.

A debate at Frames illustrated the point with D-cinema advocates squaring up against UFO Moviez vice-chairman Raaja Kanwar. Kanwar suggested tests have proved that the human eye cannot distinguish between 1.3k and 2k digital cinema, let alone between 2k and 4k, which is the standard insisted upon by the US studios' DCI group.

"By imposing DCI standards in non-Hollywood markets, the US studios are only harming themselves," Kanwar said.