The famed filmmaker says the movies are akin to "magic carpet".
"Movies are like magic carpets to the consumers. I remember talking to a bhelpuri seller near Juhu beach, who said that a song ('Zindagi kaisi hai paheli') from 'Anand' was shot here and his business increased after the movie. So, it's true that wherever Bollywood goes, tourism follows," Bhatt said at a session on Bollywood and Tourism at the Confederation of Indian Industry (CII) Tourism Summit here.
However, he said that shooting in Mumbai, hub of Hindi cinema, has become "a nightmare".
"States are not waking up to the need of providing filmmakers easy access to shooting, barring places like Gujarat and Madhya Pradesh, who are taking the initiatives," he said.
Bhatt, who directed films like "Arth", "Zakhm" and "Aashiqui", stressed the need for a single-window clearance for filmmakers.
"Once that comes through, it will ease out a lot of things. India has a cinematic workforce and it can be nothing short of paradise for foreign tourists and filmmakers. It is up to us how we can keep this romance between Bollywood and tourism going," he said.
To improve the inflow of foreign filmmakers in the country, the need is to stop being "over cautious", he added.