India has the potential to become a 3D animation hub, if the domestic animation industry executes all its production activities indigenously instead of outsourcing to the U.S., Canada, Philippines, China and Malaysia for advanced animation.

To achieve this, animation parks with hi-tech studios have to be set up. This was stated in the study "Will Indian animation industry emerge as the next knowledge destination for jobs" carried out by industry chamber, Assocham.

According to Assocham's predictions, these parks can independently generate at least two lakh new employment opportunities for skilled animators within the next there years, since there exists a huge untapped potential in this industry.

A huge pool of talent is already ready to embark on this career path. These parks will help the Indian animation industry reach a market size of over $1 billion by 2010 with a CAGR of 30%, considering that the animation indusry's estimated market size in 2007 was $450 million.

The study also points out that Indian animation corporate houses are outsourcing their advanced animation work to other countries due to the absence of hi-tech studios and improved technology. It also states that the shortage of quality institutions capable of providing technical training has resulted in shortage of animators, visualizers, conceptualizers and 3D modelers.

The study also found out that this industry is populated mostly by people in the 25-30 years age group and there is a large gap between available courses and training needs as recognized by most animation countries in India.

The study concludes that a shortage of skilled manpower and specialized training institutes, along with the lack of government funding, hi-tech studios and tax incentives are the primary reasons holding back the industry and if these key issues are addressed, the sky is the limit.