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BOMBAY, March 25 (AFP) - The 'Bollywood' film industry struggled to swallow its disappointment Monday after its offering "Lagaan" failed to win India's first ever movie Oscar.

But Lagaan's makers and other Bollywood insiders chose to look on the bright side, saying the movie's nomination in the best foreign-language film category had been a crucial learning experience that had opened new doors for Indian cinema.

The subject of intense Indian media hype in the run-up to Sunday evening's awards ceremony, "Lagaan" was finally beaten to Oscar glory by Bosnia's "No Man's Land".

"Certainly we were disappointed," said the film's producer and star, Aamir Khan, who had lobbied hard before the ceremony in Los Angeles.

"But the thing that really kept us in our spirits was that the entire country was behind us," Khan told the Star television network.

"It's been a wonderful experience. We have found something even greater than the Oscars," he added.

"Lagaan", which portrays a village's struggle under British rule in the 19th century, was only the third Indian film to be nominated for an Oscar, after "Mother India" in 1957 and "Salaam Bombay" in 1988.

Costume designer Bhanu Athai, who won an Oscar for "Gandhi", remains the only Indian to have won one of the coveted gold statuettes in competition, although legendary director Satyajit Ray was awarded an honorary Oscar for lifetime achievement.

"We are shattered that our dream was not realised," said Raghuveer Yadav, one of Lagaan's main actors.

"This was one moment we were waiting for in the last two months. We knew we had a winner on our hands, but then we lost in the finals," Yadav said.

"But what Lagaan has achieved for Indian cinema cannot be taken away from it. We will now focus on making better movies. Next time we will be winners as Lagaan was a good learning lesson in quality cinema."

The 5.3-million-dollar epic tells the story of a group of villagers in the 1890s struggling to pay "lagaan", or tax, to their British overseers.

The British challenge the villagers to a cricket match. If the villagers win, they are free from tax for three years. If they lose, they pay triple.

The climax of the movie, the match itself, runs for more than an hour, which added massively to the film's attraction in cricket-mad India -- but perhaps not overseas.

"Yes, it's a disappointment not to win the Oscar. But only one had to win and four had to lose," said Javed Akhtar, who penned the lyrics for "Lagaan" which, like most Bollywood movies, included numerous song-and-dance numbers.

"But Lagaan will now push producers to make good films. Selection of movies will now be better and of higher quality," Akhtar said, calling for active government support to the domestic film industry.

Information and Broadcasting Minister Sushma Swaraj expressed disappointment, but said Lagaan's Oscar nomination had been an important event in the history of Indian cinema.

"We could not achieve victory but we were very close to the goal and it is a remarkable achievement in itself," Swaraj said.

Bollywood's top producer-director, Subhash Ghai, said Oscar success would have been a huge boost not just to India but to the entire South Asian film industry.

"It was time to prove that we belong to one world, neither east nor west, but the best. It does not matter whether it is Hollywood or Bollywood," Ghai said. 

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