The coming of sound with the first Indian talkie, Alam Ara (1931), soon divided the cinema audiences. Bombay became the centre of the Hindi-Urdu film, using a form of spoken language, which was understood at varying levels over much of north India. Hindi was later to become the (contested) national language of India, like Urdu was to Pakistan. This Hindi-Urdu film evolved a style which would be seen as national, while the other cinemas began to be regarded as local or regional.

A studio system thrived in Bombay until the late 1940s with the emergence of the independent producer, who saw the star as the critical box-office factor, and began to chase the big stars for their movies. The stars in turn hiked their prices to unheard of levels, eating up most of the producers' budgets, a trend which has continued to the present Indian film industry.

The 1930s saw sweeping changes to the industry, technically and stylistically. The most remarkable thing that happened in Indian film industry was in 1931, when India's first talkie, 'Alam Ara', directed by Ardeshir Irani was released. Dubbed into Hindi and Urdu, the film was a smash hit and a new revolution began in the Indian film industry. It's phenomenal success all over India lead to other 'Talking, Singing and Dancing' productions to be hurriedly put into production. At the same time, it marked the beginning of the Talkie era in South Indian film industries also. The first talkie films in Bengali (Jumai Shasthi), Telugu (Bhakta Prahlad) and Tamil (Kalidass) were released in the same year 1931.

The 30's is recognized as the decade of social protest in the history of India films. In the 30's three major film centres developed which were based in Bombay (Mumbai), Calcutta (Kolkata) and Madras (Chennai). Of these centres, Bombay was known for the making of films geared for national distribution, while Madras and Calcutta were known for their regional films.

From the 1940's to the late 1950's, the films with their concentration on vibrant song and dance, were for many, the most memorable in Indian film history. The 1940s and 1950s also saw the emergence of the 'playback singing', the off-camera voice that performs the songs that the actors and actresses subsequently mime to. Lata Mangeshkar, her sister Asha Bhonsle, Muhammed Rafi, Kishore Kumar etc are the singers who dominated the Hindi film industry. Now music became an important ingredient in Indian cinema.