Tamil Nadu’s recently announced Animation Visual Effects Gaming Comics and Extender Reality (AVGC XR) policy is expected to help the State become a hub in the emerging digital content industry.
Speaking to businessline, leaders from these sectors say that apart from the benefits of bringing these new-gen industries under the government’s purview, the policy’s focus on early stage support and talent creation will give the state a leg up in the long term.
The policy, in effect for five years, aims to attract high-profile AVGC-XR investments to Tamil Nadu as anchor units while also supporting the creation of 200 start-ups and 100 larger companies. These should create about 2 lakh jobs and capture 20 per cent of the Indian AVGC market, expected to reach about $6 billion by 2030.
A gaming industry executive who was consulted as part of the policy making process said that its push for job creation is particularly significant given the current context . “Given the challenges that the IT sector is facing, the AVGC domains can be a good alternative. Though the number of jobs might not be that high, these domains are largely safe from AI and hence focusing on building talent here is crucial,” he said.
Main differentiator
He added that the main differentiator in Tamil Nadu’s approach has been its focus on building an incubation ecosystem to grow the industry ground up.
“In gaming for instance, they are providing funding for studios with early-stage prototypes and connecting them with global publishers. They can also claim reimbursements on certification costs for their IP, reducing the costs for taking their games international,” he said.
In terms of the financial incentives, AVGC firms will now be able to tap into proceeds from TNESSF, TANSEED, TANFUND and iTNT Foundation Fund. The policy also proposes a ₹250 crore research and technology fund to promote research in the field. It also provides for a 100 per cent reimbursement of IP filing costs and 50 per cent reimbursement of costs for participation in global industry events for AVGC companies.
Key initiative
A key initiative would be the setting up of anAVGC-XR Centre of Excellence in Chennai with facilities such as performance capture studios, XR testing labs and immersive content production infrastructure. Similar regional centres are planned in Coimbatore, Madurai, Tiruchy, Salem and Tirunelveli.
In terms of talent building, the policy proposes curriculum reforms with specialised courses in animation, VFX, gaming and XR, and digital arts centres across 300–400 colleges. It also provides for scholarships up to ₹2 lakh per year under the Naan Mudhalvan programme for students pursuing these courses.
Manish Agarwal, Board Member, Game Developers Association of India(GDAI) believes that the policy will go a long way in recognising gaming and interactive media as a serious creative and technology industry in the State. “By focusing on skills, incubation, and industry collaboration, the state is laying the groundwork for a strong game development ecosystem. For Indian studios to compete globally, we need more regional hubs of talent and innovation,” he said.
Published on March 16, 2026