"The problem is that whenever we talk about children's films in India, the first thing that comes to mind is a very dumbed down, very stupid film which is just 'ha ha, hi hi'... stuff like that. If we change that approach, then intelligent children's films can be made," Kukunoor said at the Smile's International Children's Film Festival.
"If you look at a lot of animation films made abroad, as an adult you can enjoy them and as a child they can enjoy it," the director added.
Asked if there was a need for more children's films in India, he said: "Definitely."
"Film is an art form and business is always associated with it. If we genuinely start making films for kids, I think we can see the business side also."
Kukunoor's upcoming film "Dhanak" is a children's film which won an award at the Berlin International Film Festival.
His films "Iqbal", "Rockford" and "Aashayein" had important characters played by children.
But Kukunoor says: "The problem is that right now, all of us are fighting the same battle. It's both helpful and dangerous to be called a children's film."
On Marathi film "Killa" receiving rave reviews, Kukunoor said: "If 3-4 films such as 'Killa' are made in a year, and they earn Rs.10 lakh or so, you will see that no one will make them."
Such films are made only when someone takes a risk, he said.
"... we will make these films, take them to film festivals, people will appreciate them and then they don't get a theatrical release," he said.
"Films such as 'Hanuman' or 'Stanley Ka Dabba' have done well but other children's films that have done well had a big star like Aamir Khan in 'Taare Zameen Par' or Amitabh Bachchan in 'Bhootnath Returns'," he said.
On having stars to get more viewership for children's films, he said: "It's a smart move, but not everyone is willing to jump in and help a film out.