According to the FICCI‑EY Media & Entertainment Report 2025, the Indian VFX segment saw a steep 14 % decline in 2024, amid broader industry adjustments. The animation, VFX & post-production sector also contracted by 9 %, falling to ₹103 billion (~US$1.24 billion) last year (animationxpress.com, ey.com).
High‑Budget Films Maintain Strong VFX Investment
Despite the overall downturn, high‑budget domestic films continue to invest heavily in VFX, dedicating as much as 30 % of their total budget to visual effects, while mid‑budget productions allocate approximately 15 %. This indicates sustained confidence in VFX as a vital tool for cinematic storytelling and global competitiveness .
Balancing Growth and Contraction
The disparity between sector contraction and continued investment reveals a strategic reallocation in the Indian VFX landscape. While smaller studios may have felt the squeeze from reduced project volumes, the largest film productions have doubled down on special effects to meet audience expectations.
What It Means for AVGC in 2025
- 🔹 Industry Consolidation: Smaller VFX firms may consolidate or merge to remain viable.
- 🔹 Tech Investments: Continued demand for high-end effects will drive adoption of real-time rendering, AI, and cloud tools—especially in premium productions.
- 🔹 Upskilling Opportunity: With larger budgets allocated to VFX-heavy films, there’s demand for talent skilled in advanced software and compositing workflows.
