Mumbai: The sleepy village scene hints at Europe, circa 16th century. Complete with city hall and village green, the quaint setting could be anywhere from the Swiss Alps to the English countryside.

In reality, it is a film set at ND Studio, on a sprawling, dusty expanse of land just outside Karjat, north of Mumbai.

The placid backdrop —sought-after for decades by Indian film industry location scouts scouring other lands to make the perfect picture—has finally come full circle to Bollywood, albeit through artificial construction. And in a marriage made possible in the new global order of entertainment and economics, Hollywood is interested.

The studio, which also offers access to lakes, mountains and sets resembling Singapore, Mumbai and many European locations, is at the vanguard of a new phenomenon: the outsourcing of film production.

US-based movie studio 20th Century Fox has signed a 10-year deal to hire four floors at Big ND Studio, as it is known following last year’s acquisition of a 50% stake by Reliance Entertainment. Walt Disney signed up last year to shoot at the studio for 10 weeks.

It comes on the heels of an approach from Warner Bros. Pictures for floor space at the studio for the filming of Shantaram, directed by Mira Nair.

Building big: N.D. Studios founder Nitin Desai says he faces no budget constraint in developing the facility. (Abhijit Bhatlekar / Mint)

ND Studio, which lays claim to having the largest floor space of all studios in Asia, and has aspirations to rival UK-based Pinewood Studios as the world’s biggest film production facility in terms of physical space, is keen to cash in on its technical expertise and low-cost labour to attract lucrative outsourcing deals from international film houses.

“Film production outsourcing could well be a big opportunity for Indian film studios," said Desai. “The cost of producing a film in India is much less than other big markets such as the US or Europe."

Analysts estimate that it costs more than $60 million (about Rs240 crore) on average, to produce, market and distribute a film in Hollywood, although the cost of a blockbuster, along the lines of a Star Wars or Harry Potter, could cross the $100 million threshold. In contrast, the average cost of making a film in India is about $5 million, with the upper limit at $20-25 million.

Reliance Entertainment’s strategy to secure control of Big ND Studio marks a bid to ramp up the company’s operations in a fragmented segment of the rapidly growing market. The production outsourcing business contains just a few major players, such as Yash Raj Studios, Ramoji Film City, near Hyderabad, and RK Studios, in Mumbai, with most studios still operated either by the founding families, or small-scale entrepreneurs.

Industry observers predict that while the lack of scale and structure has hampered competitiveness, the Rs500 crore sector will see a similar consolidation in two years’ time, to the sort being experienced by the rest of the industry.

Farokh Balsara, head of the media practise at consultacy firm Ernst and Young, adds that film studios are also treating film outsourcing to India as an opportunity to research the Indian market. “What (Hollywood) studios are now trying to do, is attempt to get the Indian market," he said. “They want to produce Indian films for the Indian market."

Desai believes building capacity and providing expertise will help the studio compete more effectively and secure larger deals. “The specialty of Big ND is to provide production design and construction skills as well as studios," he says. “I have been providing studio construction and designer services to film producers for the past 21 years. We are a one-stop shop."

The convenience of the facility and proximity to Mumbai has appealed to directors including Ashutosh Gowarikar, who used Big ND for some of the filming for Jodhaa Akbar, and Madhur Bhandarkar, director of Traffic Signal.

“A one-stop shop certainly helps if your film has extensive outdoor/indoor set work," said Kunal Kohli, who directed Hum Tum and Fanna. “You’d rather put them all up in one studio than look around for different locations."

Despite having provided the facilities for films such as Gandhi, My Father, Lage Raho Munnabhai and Salaam-E-Ishq, Desai decided he needed to team up with a corporate partner in order to realize his vision of running the world’s biggest film production studio.

“I realized that studio production had much larger potential and I, independently, may not be able to exploit this opportunity," says Desai. “I have the vision and Reliance put in the financial backing."

He said he has “no real budget constraint". The studio is currently on a 50-acre land and Reliance will take that to 150 acres this year. It is also planning to add six shooting floors to the existing three, including a 400ft by 200ft floor with capacity to put up the set for a football stadium.

Other plans include a 200ft by 200ft floor, as well as a 150ft by 150ft floor, and mechanical effects and visual effects facilities, as well as basic studio facilities, all of which a film company will be able to hire for about Rs1.5 lakh a day. Big ND will also offer boarding and lodging options for film makers, their cast and crew.

“We aim to provide all services required in producing a film," said Mahesh Ramanathan, chief operating officer, Big Motion Pictures, a division of Reliance Entertainment. “A producer can walk in with a script and walk out with his film. That’s the idea we are working on."