In what is being touted as a dream deal for a Hollywood movie industry facing the bruising global economic meltdown, Indian billionaire Anil Ambani, and US movie mogul Steven Spielberg have set in motion a previously announced $825-million deal to make films for international audiences out of the Dream Works Studios in Los Angeles.

According to an agreement that has created a global buzz, Ambani's Reliance BIG Entertainment will pump $325 million into the venture while a matching figure will be raised from banks; $175 million will come from the Walt Disney Company. For its part, Spielberg's Dream Works will make a projected five to six films a year under the pact. The joint venture’s first release will be next year.

With what amounts to a huge injection of Indian cash into Hollywood, Dream Works will have the benefit of having Disney handle the marketing and distribution of the deal's projects around the world, except in India where Reliance will retain distribution rights.

The ultimate Bollywood meets Hollywood deal sees the Reliance Anil Dhirubhai Ambani Group (ADAG), one of India's top three industrial houses, team up with one of the premiere American filmmakers of his generation. Spielberg's work on films like ET: the Extraterrestrial, the Indiana Jones franchise and Saving Private Ryan have set a tone for blockbuster movies. Ambani, one of India's richest men, has built an enviable entertainment conglomerate through acquisitions and partnerships across several platforms — radio, music, sports, gaming, animation, Internet and television — after a bitter parting in 2006 with his elder brother Mukesh Ambani.

Reliance is a key player in Bollywood, the nickname for the world’s most prolific film center, which churns out over 900 films a year in 20 languages. Ambani also owns 428 cinema screens across India, the US, Malaysia and Mauritius, most of them screening Hindi films.

The deal continues Ambani's desire to link up with partners in the West. He has had deals with a number of Hollywood figures recently, including Nicolas Cage's Saturn Productions, Jim Carrey's JC 23 Entertainment, George Clooney's Smokehouse Productions, Chris Columbus' 1492 Pictures and Tom Hanks' Playtone Productions.

Ambani has now set his eyes even higher. "As Hollywood is the epicenter of global entertainment content, we see a great opportunity there," said Rajesh Sawhney, Reliance Entertainment's president at a recent media event.

The tie-up with Spielberg will make Ambani a global player at a time when Hollywood financial deals are getting more and more intricate.

Despite Spielberg's reputation for crafting blockbusters, he finds himself in financial turbulence and Ambani seems a welcome partner. His troubles began last year when he snapped ties with Paramount Pictures after falling out with its owner Sumner Redstone, thus making DreamWorks an independent outfit.

Dream Works was sold to Paramount in 2006 for $1.6 billion, but Spielberg and his partner, music baron David Geffen, found themselves at loggerheads with Redstone despite continued box office successes.

After the Paramount divorce, Spielberg struggled to raise money to get his new projects off the ground. The collapse of insurance giant AIG, which was due to provide a portion of the cash, and the tightening of credit markets, didn’t help. Dream Works' banker, JP Morgan, postponed efforts to raise more money. In the meantime, Spielberg's Wunderkinder charitable foundation also lost a substantial sum after investing heavily in the collapsed $50 billion Ponzi scheme run by jailed Wall Street financier Bernard Madoff.

Ironically, given his reputation for producing some of the most lucrative films ever made, Spielberg failed to raise $750m of the $1.2bn needed to underwrite DreamWorks' forthcoming movies. Without the cash, his firm has been unable to begin work on a selection of films, including eagerly awaited projects like Peter Morgan's Hereafter, to be directed by Clint Eastwood; a terrorist thriller called Motorcade and the comedy Dinner for Schmucks.

The filmmaker currently has just one major project in production – Tintin, a $130 million 3D version of the comic character. The fund crunch has also cost Spielberg the right to partner on a pet project about Abraham Lincoln that the director had hoped to wrap up in time for the bicentennial of Lincoln's birth, which is taking place this year.

Given this backdrop, Ambani was just the thing, a deus ex machina to save the day from stage left. He agreed to finance a total of 17 proposed films over the next seven years. The cash will allow Spielberg and partners Jeffrey Kaztenberg and Geffen to end their agreement with Paramount Pictures.

Not that Ambani is in it purely for the publicity. According to Forbes magazine he has slipped in the billionaire stakes, seeing his fortunes plummet by a whopping $32 billion in just one year, the largest drop recorded by the magazine this year. His plans to merge Reliance Communications with South Africa's MTN were also scuttled last July after brother Mukesh threatened to sue, claiming he had right of first refusal.

Despite the publicity, some Indian experts feel Reliance is getting into Hollywood at a particularly bad time. "The movie business is riskier than other businesses because of multifarious factors involved. It deals intangible things like creativity, which can be subjective and highly unpredictable. In that sense this is a hugely risky venture," says Kamal Narang, a Bollywood film analyst.

Some are also unsure how the spectacular deal will play out for the Indian film industry. "I don’t see how this particular venture will help Bollywood – which could do with some fund infusion – as the investment is targeted only at Hollywood," says Omkar Shroff of the distribution firm Swagat Films. "It may improve India’s image in the West but that’s about it."

So will Ambani emerge as Hollywood’s next mover and shaker? There is considerable uncertainty on that score, especially because the Indian experience hasn’t been particularly rewarding in California. Last year, Sony Pictures came to Bollywood to co-produce Saawariya while Warner Bros produced Nikhil Advani's film Chandni Chowk to China, both of which tanked at the box office despite mega budgets and slick packaging.

However, analysts point out that Reliance’s case is different. The company owns over 200 theater screens in North America, not to speak of its properties in India, endowing it with enough marketing muscle to push its movies and retain a hold over them. "For Reliance BIG Entertainment, the Hollywood deal is only a baby step towards making big strides in the global entertainment domain as a new generation media company," says Narang.

So far, the only other Indian company to make a big splash in Hollywood has been UTV. Its co-production with 20th Century Fox — The Happening, directed by M. Night Shyamalan – is due for release soon. The outfit also has other projects in the works with major Hollywood studios, like Walt Disney, which has bought a $230-million stake in the company, and a tie-up with Will Smith’s production house, Overbrooks, to produce two big-budget movies.

In other words, how the deal plays out for Ambani and Spielberg transcends these two larger-than-life individuals. The global economic climate, box office collections and luck will all play a huge part in determining whether this movie romance will last after the lights come up.