Hollywood and Bollywood linked arms Thursday to fight piracy, with the announcement of a coalition among the Motion Picture Association of America and seven Indian companies to tackle counterfeiting in one of the world's largest film markets.

The alliance comes as Hollywood tries to tap global markets more aggressively and as Indian movie studios grow in size and stature — narrowing the gap between Indian and U.S. filmmakers, who have not always seen eye-to-eye on intellectual property issues.

A year in the making, the coalition to fight film piracy in India will work with movie theaters to crack down on camcorder piracy — the source of 90 percent of all pirated DVDs — with police to tighten enforcement, with Internet service providers to fight Internet piracy and with politicians to create more effective laws.

MPAA, which has similar anti-piracy alliances in the U.S., Europe and Hong Kong, would not disclose the size of the coalition's budget but said funding would come from members.

The Indian film industry has a rich history of copycat productions and traditionally has had less respect for the sanctity of intellectual property than Hollywood would like.

In 2008, for example, Warner Bros. unsuccessfully sued to block the release of an Indian Punjabi film called "Hari Puttar — A Comedy of Terrors" on the grounds that the name was too close to its Harry Potter series.

That friction has started to ease with the rise of corporate studios in India, like UTV Motion Pictures and Reliance Big Pictures, which last year took a 50 percent share in Steven Spielberg's DreamWorks for $325 million.

Over the last two years, a growing number of successful partnerships — like "My Name is Khan," produced by two Indian companies and distributed by Fox in India and the U.S. — as well as successful crossover movies — like "Slumdog Millionaire" and "Avatar," which both did well in India — have also strengthened ties.

"People are becoming more of the same mind," Dan Glickman, the outgoing chairman of the Motion Picture Association of America, told The Associated Press in an interview. "The Indian film industry now understands their product is getting stolen at significant rates."

Piracy cost India's $2.3 billion film industry $959 million and 571,000 jobs in 2008, according to an Ernst & Young study, and pirated DVDs account for 60 percent of the market, according to KPMG.

"Piracy is one of the most pernicious problems facing the entertainment industry, and the Indian industry in particular," said Reliance Big Pictures chief executive Sanjeev Lamba.

Lamba attributed part of the financial success of "3 Idiots," distributed by Reliance Big Pictures last year, to the studio's aggressive anti-piracy efforts.

Round-the-clock work helped prevent 10 million illegal downloads, he said, adding that at one point his staff was finding new illegal digital copies of the film on the Internet every five minutes.

Piracy has gotten worse in India as Internet connection speeds have improved and DVD player usage has increased.

In the last two years, the number of Indian households with DVD players surged from 4 million to 45 million, said Harish Dayani, chief executive of India's Moser Baer, the world's second-largest CD and DVD manufacturer.

He estimates that Indian consumers snap up 700 million illegal DVDs every year, giving them little incentive to go to theaters and generating 15 billion rupees ($330 million) for counterfeiters.

Reducing that leakage is crucial for Hollywood studios as they try to push into India.

"More and more, the growth of film is outside the U.S.," Glickman said. "Hollywood is now looking at the world as their marketplace."

KPMG expects Indian film industry revenues to hit 136.7 billion rupees ($3 billion) by 2014, an average annual growth of 8.9 percent.

"This is a country of 1 billion people who love movies more than anywhere else in the world," Glickman said. "We'd be foolish not to want to come into this market."