When UK chancellor Gordon Brown made a government visit to India last month it was telling that he made a bee-line for Bollywood, taking in a tour of the YRF Studios in Mumbai and speaking of the need to provide further incentives for Indian film-makers to shoot in the UK.

This comes at a time when Bollywood productions are going global. 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.

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. To this end, the UK government and strategic agencies the UK Film Council and Film London, have been making overtures to Bollywood players. A delegation led by chancellor Brown travelled to Yorkshire in November for the launch of the International Indian Film Academy Awards (held June 7-10 this year). In March, Film London will send a delegation to India's Frames convention, where UK and Indian producers meet to discuss collaborations on film projects, and in November will visit Mumbai to discuss joint revenues and partnerships. "We worked on more than a dozen Indian films last year thanks to us approaching the producers," says Film London CEO Adrian Wootton.

The backbone of the drive is the new UK-India co-production treaty, announced in 2005 and expected to come into force in the summer. The treaty was set up to "enable film-makers in the UK and India to pool their resources to create films which will benefit both countries financially and culturally," according to the Department for Culture, Media and Sport (Dcms), which will be implementing it.

However, the treaty has been three years in the making and is still not signed. Even those working closely on the treaty have expressed their doubts about whether it will see the light of day. "I've gone from being optimistic at the start to distinctly pessimistic about when it will be released," says one government source.

But most agree the desire for Indian producers and the UK film industry to work together is genuine and stronger than ever on both sides. "We get hundreds of phone calls a day from Indian producers interested in shooting here," says Film London's Emma Wass, who assisted producer Aditya Chopra with his Dance Baby Dance (Jhoom Barabar Jhoom), which shot at locations around London last year, including Waterloo train station. "It was an ambitious shoot in which they wanted complete control of the station," says Wass. "In the end a compromise was reached, and they shot a big dance scene on the main concourse." (see UK shoots, right)

London landmarks such as Waterloo station, the London Eye and Tower Bridge are major draws for Indian producers looking to add a little exotic flavour to their films. The central London borough of Westminster alone hosted 35 productions last year and five the year before. Southwark is also a popular destination. Bollywood shoots visit the UK for this type of location work, rather than for the UK's world-class studios. "I don't think they will ever build sets here because the costs are always going to be a lot less in India," says Andrew Pavord, film officer for Southwark and a former location manager on Bollywood films including international box-office hit Kabhi Khushi Kabhie Gham.

Bureaucratic barriers

Several Indian producers bemoan the amount of red tape they face when filming in the UK. Director Vipul Shah shot most of his $7.8m film Namastey London in the capital last year using a UK crew. But the experience was far from straightforward. "For every location you have to go through two or three councils to get the permits sorted out," Shah says. This is not something Indian producers are used to.

"The problem is we [the UK crew] like to do things a decent time in advance and they (the Indian crew) tend to be more spontaneous," says Pavord. "They don't bring enormous construction and prop trucks, they tend to use what they can find on location. They'll say, 'I need a dog for this scene,' and then I have to knock on doors to see if anyone's got a dog. That sort of spontaneity keeps the budget down but it can also mean you don't get exactly what you want.

"They don't do days off either, they work to schedules. On Kabhi Khushi we worked 44 days on the trot. This was difficult for me - with a UK crew I've got certain rules to obey and it means I have to bring in relief crews to do one or two days a week."

Film London's Wootton points out: "There's a profound difference in the complexity of city life in London compared to, say, shooting in India where the cost base will inevitably be lower and access will probably be less regulated. But it's our job to act as a broker between the local authorities to ensure it's as seamless as possible for the film-makers that do shoot here."

However, even getting into the UK can be complicated for Indian producers. "The Home Office is now a lot more stringent about who it gives shooting permits to," says Clare Wise, head of international at the UK Film Council. "They ask for a contract of engagement and bank-account details to prove they will be returning to India. A lot of the below-the-line, largely unskilled labour that Indian film-makers bring with them, don't have contracts or bank accounts."

High costs in London are also an issue. Director Rakesh Mehra considered shooting his Bafta-nominated Rang De Basanti in the UK but decided instead on shooting in India. "The costs in Europe, especially in the UK, are pretty exorbitant compared to Indian standards - that you can attribute to the strength of the pound compared to the rupee. On the other hand, there's an endless pool of talent in the UK and the technicians are by far some of the best in the world. Right from scripting to the editing, Indian film-makers should use UK crew if they are shooting in the UK."

Another issue is the contrast in funding structures between the UK and India. Says Wise: "With 99.9% of the films made in India the money is raised through private equity and an upfront distribution guarantee, which is usually for about 40% of the money, and all the private equity is paid back on the first day of release. So you have your money and you shoot because the money and the box-office window are time sensitive."

Because of this, several Indian productions have in the past opted to shoot a few scenes in the UK under the radar, without permits or locations clearance.

One UK producer who was approached by a Bollywood director to work as a production manager on an under-the-radar project says: "They were talking about a $5m-$10m production initially, but these were just words. We never saw a budget or a script, and they somehow wanted to shoot in the heart of London without permits and using their own crew without paying the required rates."

Film London's Wootton says that as the ambitions of Indian producers rise, such fly-by-night projects will be in the minority as producers look to get the most out of the UK. "I believe there will be more Indian production companies setting up here, taking advantage of our skilled technicians including post-production facilities, as they look to take on more challenging films [with better special effects] that will appeal to an international audience."

Mehra says: "I see a major contribution from the UK over the next few years for Indian film-makers, in terms of production management, financing, producers, cinematographers and post-production."