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A Bangladeshi man passes a wall with advertisements for screenings in Dhaka, in 2004.
"We lifted the ban to boost the cinema industry," Bangladesh Commerce Minister Faruk Khan told AFP.
Cinema hall owners, who have been clamouring to be allowed to show Indian films, said they expected to start showing Indian films shortly.
Kazi Firoz Rashid, president of Bangladesh Cinema Halls Owners Association, said the government's decision was "the best thing to have happened" to the country's cinemas.
The number of cinema theatres has slid to 600 in 2010 from 1,600 in 2000 in the country with Bangladeshi films and soft-porn English-language films shown in movie houses failing to draw viewers.
"Film enthusiasts can easily see good Indian films on cable television so why should we stop Indian films being screened in our cinemas?" Rashid said.
"By contrast, the standards, scripts and production of Bangladeshi films are so stale and poor they have trouble winning hearts or making enough money," he said.
Pirated DVD copies of Bollywood movies circulate widely in Bangladesh in the absence of them being shown in cinemas and the films are hugely popular.
The lifting of the ban comes amid warming relations between India and Bangladesh after ties worsened between the neighbours when an Islamist-allied government was in power in Dhaka from 2001 to 2006.
"The new order scraps the ban and allows screening of Indian and other South Asian films in local cinemas provided they have English subtitles," the government's Film Censor Board chief Surat Kumar Sarker said.
But not everyone supports the move.
"Indian films will completely destroy our film industry and our culture. At least 25,000 people will be jobless," said Masum Parvez Rubel, a leading star and a co-coordinator of a newly created front against Indian films.
"We have appealed to the commerce minister and the authorities to reverse the decision. Otherwise, we'll protest until the last drop of blood," he told AFP.
India's prolific film industry churns out about 1,000 new releases a year.
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Cinema hall owners, who have been clamouring to be allowed to show Indian films, said they expected to start showing Indian films shortly.
Kazi Firoz Rashid, president of Bangladesh Cinema Halls Owners Association, said the government's decision was "the best thing to have happened" to the country's cinemas.
The number of cinema theatres has slid to 600 in 2010 from 1,600 in 2000 in the country with Bangladeshi films and soft-porn English-language films shown in movie houses failing to draw viewers.
"Film enthusiasts can easily see good Indian films on cable television so why should we stop Indian films being screened in our cinemas?" Rashid said.
"By contrast, the standards, scripts and production of Bangladeshi films are so stale and poor they have trouble winning hearts or making enough money," he said.
Pirated DVD copies of Bollywood movies circulate widely in Bangladesh in the absence of them being shown in cinemas and the films are hugely popular.
The lifting of the ban comes amid warming relations between India and Bangladesh after ties worsened between the neighbours when an Islamist-allied government was in power in Dhaka from 2001 to 2006.
"The new order scraps the ban and allows screening of Indian and other South Asian films in local cinemas provided they have English subtitles," the government's Film Censor Board chief Surat Kumar Sarker said.
But not everyone supports the move.
"Indian films will completely destroy our film industry and our culture. At least 25,000 people will be jobless," said Masum Parvez Rubel, a leading star and a co-coordinator of a newly created front against Indian films.
"We have appealed to the commerce minister and the authorities to reverse the decision. Otherwise, we'll protest until the last drop of blood," he told AFP.
India's prolific film industry churns out about 1,000 new releases a year.
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