Today animation is used for commercials, promotional films, music videos, computer games and to provide special effects for live action programs. Animation is at the heart of all the major advances being made in film production technique. Digital Animation is often perceived as genre- children's cartoons. But in fact, it is a production process that pervades different genres across every aspect of the audio - visual industry. Animation is characterized by a lack of live action. It is created by recording still images, which are then combined in sequence so that the difference between each image creates an impression of movement. The classic 2D animation, 3D computer generated images (CGI) and model animation all these constitute animation. Animation is used as a production technique for film, television, video, internet and computer games.

The global animation industry has undergone rapid expansion in recent years, and it appears to still have potential for further growth. Multi-channel television, the popularity of computer games, the internet and the new found opportunities for cross-platform exploitation have all contributed to this growth.

Animated productions are easier to export than live action programs. It is also simpler to dub animation into different languages. Animation is less likely to date and can hence be exploited for much longer periods than live action. Disney's Snow White still gets theatrical releases in cinemas even thought it was produced in 1936. Many children's programs can be repeated at regular intervals as the target audience is constantly renewing as children develop.

Animated characters can also be exploited beyond the small screen. Many programs have seen spin-off products such as toys, books, games and collection cards. Merchandising and licensing has become a major source of income for broadcaster and production companies, often earning more than the production from which they were originally spun out of. This again has fuelled the demand for animation.

Hollywood has taken a serious interest in Animation and its biggest film last year was "Finding Nemo". The top ten Digital Animation films since 1995 are Toy Story, Antz, A Bugs life, Toy Story 2, Shrek, Final Fantasy, Monsters Inc., Ice Age, Jonah and Finding Nemo have grossed over $ 3.5 billion. The industry has developed globally with successful products being exploited in many different ways across the world. It has also become highly competitive as a successful product can have huge revenue potentials when fully exploited. However, animation costs more to produce than live action films and the industry relies heavily on co-production agreements and attracting finance from overseas. Additionally, production can often take place across different territories, with the creative development taking place in the 'home' territory, but with much of the physical production being contracted out to other territories where labor costs are cheaper. Animation is therefore a truly global industry. The Indian Animation Industry is one of the fastest growing sectors of the Entertainment business.

The India Animation Industry is now known worldwide for its creativity, story telling ability and value for money. Original Indian animation content and shows of the international quality appeals to the audiences in North America and Europe as well as within Asia. Indian characters such as Vikram-Vital stories, Hanuman, Birbal, Tenali Rama and Pandavas could be used in more strategic games and for sheer action, the Mahabharata & Ramayana throws open a lot of opportunities.

Animation Producers Association of India (APAI) was officially inaugurated by Ms. Sushma Swaraj, Union Minister for Information and Broadcasting, Government of India at the 33rd International Film Festival of India on 3rd October 2002 in New Delhi. The Animation Producers Association of India (APAI) also made its international debut with a formal launch by Mr. Subhash Chandra, Chairman of Zee Network at MIPCOM 2002 in Cannes on 8th October 2002.

The 54 Indian companies and studios that form the Animation Producers Association of India are all independent entities with individual expertise in special effects, 2D and 3D animation, character design, set extension, compositing, motion graphics and broadcast design. The companies have consistently demonstrated their creativity and mastery in 2D/3D animation and visual effects with internationally recognized productions.

Animation Producers Association of India had organized a special interaction with the French Animation Industry in association with the Embassy of France in New Delhi, TVFI and the French association of film animation producers (SPFA) in March 2003. A high level delegation of Canadian Government visited India in October 2003 to discuss co-productions and joint ventures with the members of Animation Producers Association of India. Following the visit of the Delegation, the Animation Producers Association of India continued their associations with the French and Canadian companies at Annecy 2003 and MIP 2004 in France.

In another initiative of APAI, Animation Training Task Force acknowledged that it's getting harder to find the skilled people necessary. A lot of animators have shifted to the game industry, partly because it's better pay and also because there is a serious lack of actual animation production in India. In Indian animation Industry there is a shortage of trained and talented board and layout artists. Similarly in the digital studio, there are an awful lot of computer-literate graduates floating around, but very few of them have any animation knowledge. Maintaining a skilled workforce is a fundamental to any competitive industry.