While the animated adventures of Anpanman -- arguably the most popular cartoon series among young children in Japan -- have yet to catch on in the U.S., the superhero with an edible bun for a head has found an audience in an even larger market: India.

Japanese anime has long been able to act as a bridge between the world's third largest economy and other countries, even when political and cultural tensions have been the source of great friction. India, meanwhile, has made great strides to move its animation industry forward in recent years with titles like "Chhota Bheem" aimed squarely at a domestic audience.

Last week Japanese trade and industry minister Toshimitsu Motegi visited Delhi and signed an agreement to promote cooperation between the two countries' animation industries.

Attending the signing ceremony were executives from two comic publishers -- Mumbai-based Level 10 Entertainment and Kyoto-based Zero-Sum -- as well as Tokyo animation studio Thanks Lab. The three firms have formed a partnership to launch a new TV animation serial in India.

Based on a comic created by Level 10 and Zero-Sum, the firms will serialize the Japanese-Indian produced animated film "Batu Gaiden," a tale of warring kingdoms that made a pact to settle old scores through cricket games.

The original 70-minute movie, broadcast both in English and Hindi, has run many times since April, and has proved to be one of the most popular programs on the Cartoon Network India.

Thanks Lab, which created the movie, is now trying to turn it into a weekly TV serial.

"Keeping costs down is key in animation production," Thanks Lab chief executive Motoo Kawabata told JRT Tuesday after coming back from the signing ceremony in Delhi. Over the next five months, Thanks Lab will train 18 animators in Bangalore, who will take over some of the drawing work to reduce the cost of producing the serial.

While technology has made production easier, animation still remains a labor intensive business. Tens of thousands of frames need to be hand-drawn by animators for a short movie. This work has traditionally been subcontracted to countries with cheap labor costs such as China, but rising costs there have prompted many Japanese animation houses to look for alternative production sites, and India has emerged as a new candidate.

With a population of over 1 billion people, India is an attractive consumer market. Also, unlike other major markets like China, it places no restrictions on foreign firms entering the local animation market.

Many Japanese animation studios have been looking to overseas markets recently, said officials at Japan's trade and industry ministry.

"You cannot make money in Japan," Mr. Kawabata, explains. The children's market in Japan is especially in trouble, forcing animation studios to choose either to focus on "anime" for an adult audience -- a lucrative business in itself -- or else, go overseas.

Batu Gaiden follows "Suraj The Rising Star," another animated Japanese-Indian joint production. Suraj was a 2012-13 TV serial based on a popular Japanese baseball comic "Kyojin no Hoshi" (Star of the Giants) and it was adapted to Indian tastes, using cricket rather than baseball as the theme of the story. "You cannot expect Japanese movies to get accepted in India like American movies do," Mr. Kawabata says. "Made-in-Japan doesn't carry any premium in India, where European and American products tend to dominate."

Even in burgeoning markets like India, animation itself doesn't earn enough for studios, Mr. Kawabata says, noting that merchandise such as notebooks and pen cases is where the real money is.

Just a couple of years ago, Disney products dominated the merchandise market, but Japanese cartoon characters are now gradually making inroads.

Mr. Kawabata says he hopes India will grow into one of the main markets for Thanks Lab, along with Japan. He says he is looking for annual turnover of several billions of yen in the future.