'My film is part of the peace process'

It's a habit he shares with many film producers: he keeps less important mortals waiting, and arrives an hour after our interview was scheduled. Unlike most movie moguls, however, Afzal Khan turns up with profuse apologies and a proper excuse: he has been dealing with a break-in at one of his chemist shops. The 40-year-old Huddersfield pharmacist diversified into film just two years ago, yet his company, Paragon Pictures, is thriving. His first movie, Ek Chhotisi Love Story, has so far turned a profit of £1.25m. Any movie taking over £1m at the box office is, by the standards of the subcontinental film industry, a hit. His second effort, Larki Punjaban, proved equally successful, despite controversy over the Sikh-Muslim love affair at its heart. But his third, Jarga, is his biggest challenge to date. It not only tackles a controversial subject - honour killings - but aims to help end five decades of conflict between India and Pakistan, by uniting workers from the countries' film industries. Pakistan and India banned each others' movies from cinema screens in the 1960s, and so this is no small task. Workers have crossed the border since then, but have always operated under pseudonyms. And Pakistanis have repeatedly complained about the host of "Paki-bashing" action movies that emerged in the 1980s, painting them as fanatics and terrorists. But Khan is not alone. Just as the country's leaders have vowed to restore normal relations, so Bollywood and its smaller Pakistani counterpart - dubbed Lollywood after its base in Lahore - are seeking détente. Indeed, argue film-makers, their cooperation will spur on the wider rapprochement. "Atal Bihari Vajpayee and Pervez Musharraf have started the peace process and my film is going to extend it," pledged Mahesh Bhatt, an eminent Indian director, when he premiered his latest movie in Karachi last month. He also announced that his next film would be shot in Pakistan. It would be easy to dismiss such grandiose pronouncements as run-of-the-mill PR hype. But the Indian film industry has real influence, exceeding even the cultural clout of Hollywood in its 1930s heyday. Its geographical reach encompasses not just the subcontinent but the Middle East, US and Europe. "I see the subcontinent region as a family; you have brothers and sisters and we bicker sometimes," says Rajinder Dudrah, lecturer in screen studies at Manchester University and an expert on the subcontinental film industry. "It's a fractured family relationship, and Bollywood and Lollywood are part of that. We see tensions and rivalries which can be exacerbated by the films. But there are also artists and producers trying to reach out and balance that with dialogue." Curiously, much of the impetus for change is coming from the UK. Mahesh Bhatt's producer is another Pakistan-born Brit - Sevy Ali - whose Asian Pictures International hopes to beat Paragon to releasing the first Indo-Pakistan co-production to be screened in both countries. Bhatt and Ali have talked to the Pakistani minister of information, and are to meet President Musharraf next month to discuss overturning the ban. Bhatt was born to a Muslim mother and Hindu father, and has long promoted moves towards integration. Similarly, the director-producer PD Mehra launched the Pakistan India Performing Arts Forum to encourage artistic collaborations 15 years ago. One of the first attempts at celluloid diplomacy came last September with a publicity stunt for a new film, Pinjar. The Mumbai-based stars descended on the road crossing point between the two countries to deliver flowers to disconcerted Pakistani border guards. Meanwhile, the Indian actor Urmila Matondkar has filmed a documentary series in Lahore, and when her Pakistani counterpart, Reema, visited Mumbai last month, the Indian press dubbed her "the Aishwarya Rai of Pakistan" - no mean compliment, since the latter is the undisputed queen of Bollywood. Next month Mehra will lead a delegation of Bollywood stars to meet Pakistan's prime minister, Zafarullah Jamali, as well as leading figures from the Pakistani industry. The reconciliation is not as surprising as it first appears. Despite the deep-rooted tensions between the two nations, high-quality production values of Indian movies have proved irresistible in Pakistan and customers rush to video stores to buy pirated copies of the films they cannot watch on the big screen. "Pakistan is a huge market for Bollywood, partly because its own film industry has been dwindling - but its returns are not substantial because 80% to 90% of it is on the black market," says Dudrah. "Indian films open on Friday. On Saturday - if not before - they're already available in Pakistan. That's the commercial imperative and both film industries have lots to benefit from. But historically there are also genuine grounds for friendship." He points out that while films like Hero and Line of Control can be criticised for the absence of or demonisation of Muslim figures, others have explored Islamic sub-themes; Dil Se, a huge hit, drew on Sufi mysticism and the Koran. Meanwhile, the Pakistani industry hopes to benefit from the expertise of its neighbour. Lahore's once-flourishing film sector lost hundreds of key staff during partition and was further hampered by its substandard technology. The "Islamisation" of the state under Zia ul-Haq in the late 1970s also undermined the entertainment industries, which were seen as morally degenerate. Now, Lollywood produces perhaps 40 films a year, compared to Bollywood's thousand or so releases. "The Pakistani industry is basically dying," Ali says bluntly. "If you are a film-maker, you are looked down upon. It's not encouraged in the way it is in India, because of the secular state. "We used to produce 300 films a year. And those are so poor technically that they don't get shown outside the country." But Khan warns that reconciliation will not mean a marriage of equal partners. "It's like a giant multinational working with a one-man company. India will take talented people out of the Pakistani industry. In a way it's a bigger opportunity for India," he says. It is also, as his own participation suggests, an opportunity for UK businesses. In part, Britain's involvement simply reflects this country's increasing role in the subcontinental film industry. This week, the UK government and Leicester City Council backed a £34m project to encourage Indian film-makers to produce movies in Leicester by offering tax relief. Britain also allows producers to skirt around the ban by registering the films as British-produced. Khan says Larki Punjaban was the first Pakistani-made film to win cinema release in India for almost four decades, because it arrived under a British label. UK producers are also less concerned about a possible backlash. "Being British, I'm not afraid to say something which might be construed as controversial," said Ali. "Pakistani film makers may be reluctant to jeopardise their future. People based here are much freer in terms of what they can say and I think we should speak our minds." But Lollywood and Bollywood producers increasingly talk about a new level of sophistication in the business. They point to the success of Oscar-nominated Lagaan (2002) as an example of the industry's renaissance. Actors are demanding meatier scripts; directors are insisting on more generous shooting schedules; scriptwriters are challenging the old formulas. "In the UK there's still a view of Bollywood as 'exotica'," says Dudrah, "but people are becoming more media-savvy and realise it's important cinema with content. There's more to it than songs, dance and glitter."