Bollywood, the world's biggest movie maker, has ditched production in New Zealand despite Prime Minister Helen Clark touting for business in India and giving "$50 awards" to industry stars.

Mumbai production companies, which once filmed 15 to 20 movies a year in this country, attracting thousands of Indian tourists, effectively said "cut" on New Zealand in December.

Film New Zealand has admitted that not one Bollywood movie is in production here. It blames the collapse of the business on this country's refusal to give incentives to Indian film-makers.

A Christchurch family who brought Indian film-makers to New Zealand and got an export award for building the business now say they are giving up.

"Our government doesn't want to even recognise the potential. There is no point," said Rajew Singh, of family firm Kuran Ltd. It wasn't always that way.

In 2004 Miss Clark hosted a function in Delhi promoting film production in New Zealand. She gave what Mr Singh called "$50 awards" in the form of plaques to director Rakesh Roshan and his actor son Hrithik, whose Christchurch film ‘Kaho Naa Pyaar Hai' had become a global hit.

Though comparatively low-budget, the films led to an estimated 18,000 tourists visiting a year, as well as 3000 fee-paying students from India.

Miss Clark appealed for Indian movie makers to use the "unspoiled, diverse and easily accessible landscape, a temperate climate, and high sunshine hours".

Instead, they have gone to Australia and Austria and back to Switzerland - anywhere but New Zealand.

Mr Singh said New Zealand placed obstacles before Indian film-makers. Rakesh Roshan, for example, had tried to get New Zealand's help to make a follow-up to ‘Kaho Naa Pyaar Hai', but after three months trade and enterprise had offered him $13,000. Singapore gave him $2 million.

If New Zealand put in $3 million a year to get Indian films here the payback would be about $100 million in tourism, education and investment, he said.

New Zealand was showing Lord of the Rings billion-dollar arrogance. "This million-dollar thing from Indians was thought of as a pittance." Mr Singh said New Zealand took up to five weeks to approve visas. "In India you have a movie up in that time."

Film New Zealand project manager Susan Ord insisted Indians were not suffering discrimination. "We do it to everybody else. New Zealand doesn't offer the enormous amounts of money other countries have been happy to."

Indian films could not qualify for large budget incentives because these started at $15 million and required a 70 per cent spend in New Zealand. "There isn't an Indian production, I imagine, that would get anywhere near $15 million as its total budget, let alone then being about to say they can do 70 per cent here."