'The Lunchbox' star feels the industry is in an exciting phase right now as even top stars are experimenting with their image.
"Lines are blurring now between character-actors and the typical Bollywood heroes. Today, character is the hero in a film. There is no typical hero or villain now. Like in 'Badlapur', Varun and I are both heroes as well as villains.
Ranbir Kapoor plays characters in his film.
"In fact the superstars are also attempting that. I am working with Shah Rukh Khan in 'Raees', where he plays a gangster so that is again a character," Nawazuddin told PTI in an interview.
The 40-year-old actor, who has been immensely praised for his soulful performance of a remorseless goon in 'Badlapur, said the film was a dream come true for him.
"It was of my dream of past 10 years to work with Sriram (Raghavan). I am really happy that I did 'Badlapur'. I just had a one line narration, which was 'A good guy becomes bad and the bad becomes good' and I decided to do the movie.
"Also the idea of me and Varun cast together excited me as we come from different schools of acting," Nawazuddin said.
The 'Talaash' actor said the director is his criterion to do any movie and everything else becomes secondary for him in front of a good filmmaker.
"For me the priority while signing a film is the director. A good director can create wonders even with a bad script but a bad helmer can ruin even the best script. I have no other greed than working with great directors," he said.
While fans express surprise and doubt when Nawazuddin does a big-budget commercial film like 'Kick' or picks up a 'Raees', the actor has his reason to be in these movies and that is their directors.
"I will never do something, which would upset my fans.
The big films I have done and I am doing have directors I admire and wanted to work with.
"I always wanted to work with Kabir Khan so I am doing 'Bajrangi Bhaijaan' and same goes for 'Raees' director Rahul Dholakia. If I am getting a good director and a role of my choice, why should I not do that film," Nawazuddin said.
The actor also believes it is good for him to balance between big-budget and small films as the visibility from a commercial movie helps his other projects.
"If by doing a movie with Shah Rukh or Salman brings some audience to my small movies, what is the harm in it. It is important for me to balance," he said.
Though his contemporaries are branching out in Hollywood, Nawazzudin has no such temptation.
"I would rather have my picture earn a lot in foreign market than do a film there. I am very happy that both my movies 'Gangs of Wasseypur' and 'The Lunchbox' did well in the US so I would like that to happen with my future films.
"The kind of small budget films I do are no less than the international films. If we are making that kind of cinema here then why do I need to go out. Of course, if I get something nice, I would do but I am not dying to be a part of any Hollywood movie," he said.