MUMBAI (AFP) - Bollywood producers have long been fond of filming in exotic foreign locations, but the spiralling Indian currency has seen spending on movie sets abroad drop by one third, according to a study released on Monday.

The Associated Chamber of Commerce and Industry of India (Assocham) said the amount spent on Bollywood movies outside of India in the past four months has declined by 30 per cent to 35 per cent compared with the previous four-month period.

The Indian rupee has fallen 20 per cent since May, leading some filmmakers to prefer to stay and make movies in picturesque domestic locations such as the northern Kashmir and southern Kerala states, the report said.

"Spending by Indian producers to overseas locations has fallen sharply in the recent months as they are looking for cheaper options," said Mr D.S. Rawat, secretary-general at Assocham, based on their survey of nearly 50 directors.

Those still filming abroad, especially mid- to low-budget movies, are looking for alternatives to Europe and the United States such as Sri Lanka, Dubai and Thailand, Mr Rawat said. They are also reducing the amount of days they spend on the set and looking at budget accommodation options, he added.

The declining rupee is just one troubling aspect of the Indian economy, which grew at 4.4 per cent in the first three months of the fiscal year.

Traditionally, many Bollywood producers have opted for foreign sets. The late filmmaker Yash Chopra was especially keen on a Swiss mountain backdrop, which turned Switzerland into a popular tourist destination for well-heeled Indians.

Trade analyst and critic Komal Nahta said the falling rupee was unlikely to stop big budget films being made abroad, but "they might cut corners rather than cancel a schedule", he told AFP.