The Oscar competition for Best Foreign Film may not grab many headlines in the United States, but when a movie from India secured one of the five precious slots last month, it was joyous news for those who toil in the world's largest film industry, in Bombay. Bollywood, as the movie business here is known, for years has craved international attention, but its escapist epics have generally been ignored by the West.

But "Lagaan," a 224-minute period film packed with all the ingredients of a typical Indian masala (spice) movie -- it has six musical numbers, for example -- is all set to become the first film popular with the Indian masses to cross over to the West. The nomination is also a moment of pride for an industry struggling to free itself from the clutches of organized crime.

"This is a major breakthrough," said popular Indian film critic Subhash Jha, whose work appears in numerous newspapers and magazines. "The Indian film industry feels it can hold its head high and reach out to the world."

This nation can, of course, claim one of the masters of world cinema: Satyajit Ray, whose explorations of Indian society ("Pather Panchali," "Aparajito") were staples at Western art houses from the 1950s until his death in 1992. But the director's lyrical, often somber films are poles apart from the 900 movies churned out each year (several hundred more than California can claim) by the many studios that make up the Indian film industry. Typically, they are dizzying concoctions of melodrama, garish color, fantasy and big song-and-dance routines. Indian popular films stick to a few predictable and simplistic plots: the love story, the revenge theme and the occasional social issue. They are often three hours long -- or, as with "Lagaan," even longer.

"Bollywood speaks the language of spectacle and melodrama," said Ashis Nandy, a social scientist at the New Delhi-based Center for Study of Developing Societies who has written on Indian cinema. "It is usually larger than life. It is not a language that Hollywood appreciates."

Perhaps it comes as a shock to hear that Hollywood, the home of "Freddy Got Fingered," endless serial-killer gorefests, and "Dude, Where's My Car?," is too high-minded for Bollywood. In any case, "Lagaan" is seen here as a kind of celluloid ambassador that might serve to acquaint U.S. audiences with the charms of films from Bombay. Eventually, Indian film insiders hope, their work will get frequent exposure on American and European screens.

"Hollywood has opened its doors for the Indian film industry," said "Lagaan" director Ashutosh Gowarikar, 37. "There is no looking back now."

Sony Classics plans to release the film in Europe and the United States this spring. No opening date for Washington has been set yet.

"Lagaan," which means "tax" in Hindi, the language of the film, is a simple period tale about the underdog succeeding against all odds. Made on a medium-size budget of $6 million, it has taken in $7 million since its release in June. It is a slick, well-made film with a fresh story line -- while still managing to adhere to every rule in the Bollywood book. (The requisite strong, flawless male hero is present, for example, as is the coy heroine and the clearly defined villain.)

"Lagaan" may have been nudged forward in the West when Baz Luhrmann, director of the Oscar-nominated musical "Moulin Rouge," acknowledged the Bollywood style as one of his inspirations. Now Indians are hoping that "Lagaan" might be this nation's "Crouching Tiger, Hidden Dragon."

"The song-and-dance format we were infamous for may now become our advantage," Jha observed. "The Oscar nomination puts a seal of international approval on it. We don't have to change ourselves; the world will accept us as we are."

The past year has been particularly vexing for the Indian film industry. Much of Bollywood is built on money from organized crime, and the Indian police have unearthed several gangland plots to kill movie stars who refuse to pay protection. The authorities have detained and questioned dozens of movie financiers who allegedly have links to the underworld. The Indian government has granted Bollywood official status as an "industry," a move intended to encourage banks to invest in film production so that producers need not seek illegitimate funding sources.

Only once before has a true Bollywood film been nominated for Hollywood's highest honor: "Mother India," which failed to win the 1958 prize. (Another film, "Salaam Bombay!," made by the Indian American Mira Nair and far removed from the mainstream Indian genre, was nominated in 1989.)

"Lagaan," set in 1893, tells of the triumph of good over evil. It concerns a group of simple farmers in the Indian countryside who are facing a difficult drought year and high land taxes. They are challenged by a colonial English officer to a match of cricket, at that time an exclusively British sport. If the farmers win the game, the tax will be waived for three years to come. If they lose, the tax will be tripled. In their fight for land and dignity, the farmers must not only learn and master an alien sport but also beat those who invented it.

Before every screening of the film in Hollywood in the run-up to the Oscar nominations, director Gowarikar had to explain the context of Indian cinema to audiences.

"They were amazed that even our horror films have songs," he said. "It was very difficult to convince them to come and watch. But once they came, they loved it. It was a cakewalk after that."