Indian filmmakers will be able to 'kill three birds with one stone', say experts. Piracy of Mumbai studio-based Hindi films has become rampant in Pakistan following the ban that was imposed after the India-Pakistan war in 1965.
Except for the coloured version of K. Asif's 'Mughal-E-Azam' and Akbar Khan's 'Taj Mahal', no Indian films had been screened in theatres in Pakistan after the ban.
With the Pakistan government easing the ban, Hindi films now will get access to the Pakistani market and this would check piracy. The blurring of borders will also give Indian filmmakers access to talent in Pakistan, which in turn will cut down on the resentment the Pakistan film industry feels about losing their market to India.
The film industry in Pakistan, which is based in Lahore and often referred as Lollywood, does not make enough films to keep up with the demand.
In fact, powerful figures within the Pakistan film industry are desperately trying to step up pressure on the government to allow screening of Indian movies in Pakistan. They say this is the only way the country's comatose film industry can be revived.
'The local film industry has proven itself to be completely unable to meet the demands of the local market,' says Lollywood producer Shahzad Gul who dismisses fears that opening up Pakistani cinemas to Indian movies would result in a 'complete Bollywoodisation' of Pakistan.
Gul feels that it is time to wake up and read the writing on the wall.
'Bollywood has already invaded our homes. Our cable networks air Indian films the very day they are released in India. Besides, we have easy access to all kinds of CDs and DVDs,' said Gul.
Pakistanis get to see Indian films almost immediately after the release thanks to the flourishing black market for DVDs and pirated recordings.
Pakistan had 1,300 cinema halls in the 1970s, feasting on an average annual production of around 300 movies. In 2005, the CAO could count only 270 cinema halls across the country with most of the rest having been converted into gas stations, shopping malls or car showrooms.
Only 18 movies were produced in the country last year. Lollywood needs software to feed the cinemas for 52 weeks a year. And at the same time they are convinced that 'not everything made in India ends up being a blockbuster'.
Also, it is feared that Bollywood films could lead to reaction from Islamic extremists, who believe that women in Hindi films show too much skin.
That said, it is well known that Bollywood films, songs and stars are more popular in Pakistan than anything else and in spite of the five decades of hostilities between the countries the Pakistanis continue to be swayed by the Indian entertainment industry. The ban on release of Indian films in the country had kept the pirated DVD market booming.
Even the pronounced anti-Pakistan bias in Bollywood films does not deter Pakistani fans for Hindi films. Around year 2000 the television industry in the country was completely dominated by the Indian channels, news and entertainment.
It is said that Pakistan was so hard hit by the patriotic fervour of some Indian channels during the Kargil war that the establishment, for the first time, seriously began considering competition to the much-maligned PTV.
After the Dec 13 attack on the Indian parliament, India-Pakistan ties hit a low and Islamabad imposed a ban first on Indian news channels and then on all other Indian channels.
In the desperate bid to capture vacuum created by the ban, most Pakistan-centric channels have began airing either some look-alike programmes or hiring Indian hosts.
Clearly, Bollywood films, soap operas, filmi and non-filmi songs and Indian pop groups (mostly Hindi) have become the staple diet of majority of Pakistani society.
The lure of the Indian film industry has attracted many Pakistani artists to perform on the screen or as playback singers.
'My films have always been very popular in Pakistan, and I have also had many Pakistani singers providing playback in my films. This move would take the relationship even further. The proposal is a welcome step,' says Bollywood filmmaker Mahesh Bhatt.
After providing chartbusters like 'Woh Lamhey' and 'Aadat' in 'Zeher' and 'Kalyug', Pakistani band Jal has become a hot favourite in India. Various Pakistani bands like Junoon and Strings have also made their mark in India, with Junoon contributing to even a few Hindi films.
Pakistan might be known for its Sufi music and ghazals, but bands like Jal and Junoon are fusing traditional forms with new strands to attract the youth.
Similarly, Pakistani actresses like Salma Agha, Zeba Bakhtiyar and Somy Ali tried their luck in the industry. Though they were not very successful but that has not deterred another well-known Pakistani actress - Meera - from venturing into Bollywood films.
'We are film personalities and we have to see that the bridges between the two countries are built. As artists we are supposed to spread peace and love everywhere,' said Bhatt.