KARACHI (Reuters) - It's a busy night at the Prince cinema in the Pakistani city of Karachi with cars parked across the pavement outside and spilling onto a main street.
Movie fans have a rare treat. The Indian film "Race" is being screened.
Pakistan banned Indian films after going to war with its neighbor in 1965 but over the past few years, as relations between the nuclear-armed rivals have improved, authorities have been allowing a trickle of Indian films to be shown in cinemas.
That has delighted movie fans and cinema operators but Pakistani film producers fear a flood of Indian films could mean the end of the local film industry.
"The government must stop the imports. Do you want to make Lollywood a part of the history books?" said Saeed Rizvi, chairman of the Film Producers Association, referring to the Pakistani movie industry, dubbed "Lollywood" because it is based in the city of Lahore.
Pakistan's film industry made about 30 films last year, most of them low-budget imitations of Bollywood fare. With a similar culture and virtually the same language, Pakistani films have been starved of a natural audience in India because of political differences.
At home, competition from Bollywood fare as well as the mediocrity of Pakistani films means that many Pakistanis opt to stay at home and watch Indian movies on pirated DVDs.
Cinemas have been struggling for years and many operators have given up and sold off their premises which have been converted into shopping centers or offices.
From about 750 cinemas nationwide in the 1970s, there are now 300. But Indian films are breathing life back into Pakistani cinemas.
India's film industry, including its Mumbai-based "Bollywood" studios, produces about 1,000 films a year.
Karachi cinema owner Qaiser Rafiq is screening "Taare Zameen Par," which is about a boy with a learning disability and was expected to pull in the crowds.
"Look at Hollywood or Bollywood. About 35 percent of their population watch movies at cinemas. In Pakistan, the best movie so far has only attracted just 4 percent of our population," Rafiq said.
Cinema operators are cashing in on the revival of interest in the cinema the Indian films have generated. Before screenings of Indian films began, a cinema ticket in Karachi cost 100 rupees ($1.55). Now it is 150 rupees ($2.35).
"Before the release of Indian films, a good Lollywood film would make about 700,000 in an average week. Now the best week for "Race" in a Lahore cinema made more than 2 million rupees," said another cinema manager.
Pakistani film distributors also welcome the revival of cinemas.
"It's a ground reality that Indian movies are very much liked in Pakistan," said prominent film distributor Satish Anand.
"(But) we shouldn't become dependent on Indian films. Our own industry needs to do better to compete with their rivals and our government should protect the industry," he said.
Pakistan's new culture minister, Khawaja Saad Rafique, said he had been meeting the censor board and film producers to work out a policy on films.
The government had to "decide between the profit of cinema owners and the future of Lollywood," he said.
"We have to look into the issue very carefully. But one thing is sure, it cannot be one-way traffic," Rafique told Reuters.
While Pakistani films are not officially banned in India, tense political relations and the poor quality of many Pakistani films has meant Indian distributors have shunned them.
But last month, for the first time in years, a Pakistani film opened in India. The film, "Khuda Kay Liye" (In The Name of God), is about Muslims in a post 9/11 world and deals with the rift between radical and liberal Islam, an issue that confronts India's 140 million Muslims.
As Pakistan relaxes its ban on Indian films, Rafique said he wanted to see more Pakistani films screened in India.
"If we allow some Indian films into Pakistan, then they will also have to allow Pakistani movies there," he said.
"I have asked for proposals to bring our films to a standard where they can compete with the Indian films. Then we will be in a better position to allow more Indian films, and of course, our movies would do better in India too."
Editing by Robert Birsel and Megan Goldin