Is Indian cinema on the verge of making an impact in the USA?

There's many things to write on the topic of why films from outside of the US don't seem to be able to make an impact in the US box office. Someday I hope to write a very long post about why that is (or at least why I think that is), but since I still have to read up a lot about it to properly write it, it won't be soon ;)
But to make a long story short, the most major reason that makes it almost impossible for a non-US (or independant US) film to make an impact in the USA is the system there. A few major studios pretty much own the market and the same companies that produce films also own all the major cinema chains. This means that a film that has not been produced by one of these major studios will probably only get shown in independant cinemas and these are few and far apart. There is no way that a film made outside of "the system" could get shown on a few thousand screens in the US alone as is the case with many major Hollywood productions.
Occasionally a film from outside of the US will do very good business (like Borat did recently), but when you'll check the company credits you'll always find one of the major US studios in them (for Borat it was 20th Century Fox).

India has so far never had a major financial success in the US even though interest in Indian cinema is growing. But there's two films on the horizon which might change this.

The first is Deepa Mehta's Water. In fact already based only on its Canadian box office results it's the biggest Indian box office earner ever in North America. While technically a Canadian film (that's where the financing has come from) it is about Indian issues and by Indian filmmakers (some of them like the director based in Canada and some of them from the Indian film industry like Bollywood star John Abraham).
So far it's enjoyed only a small release in the States (less than 100 screens), but it's being distributed by Fox Searchlight, which is the independant branch of 20th Century Fox and therefore I assume they have the means to give it a wider release if they think it commercially viable. It is Canada's official entry for this year's Academy Awards and has made it into the final five nominated foreign films. While Pan's Labyrinth is probably the favourite to win, Water is most often named as the other film that has a strong shot at winning the award. Ironically, Deepa Mehta has had huge problems with releasing this film in India. It had to be shot in Sri Lanka because the issues raised (it is a film about the treatment of widows in India) were so controversial in India. It has however finally passed the Indian censors and will be released there in March.
Here is a song number from the film:

The trailer is not up on youtube, but you can see it here (I don't have the required plugin, but the downloaded file works for me in vlc). You can read more about the film here.

But perhaps an even more "curious" prospect is Shantaram. It is currently in pre-production and should be released in 2008. Johnny Depp is producing it and is set to play the lead. Warner Bros is involved in the company credits so clearly we're looking at a very wide release. Originally Peter Weir was attached to direct, but it seems he has left the project "over artistic differences" with Johnny Depp and it is now Mira Nair who will direct it. The film is set in Bombay and the Indian cast will probably include some big names. Amitabh Bachchan has recently been attached to the project and is apparently going to star as something of a mentor to Johnny Depp's character. There are rumours (the imdb boards are my source for them so I'm not sure they are reliable) that the producers are in talks with Shahrukh Khan over a smaller role. Certainly there is reason to think that the author of the book is keen on this since he has used Shahrukh's photo on his site as an example of what one of his characters might look like.

Needless to say I'm quite excited about both films ;)
Of course it's quite likely that Water will not win an Academy Award and Shantaram (although I think a wide release is a given) might not spark people's interest in Bollywood stars, but at least what these two films do show is that America is starting to take Indian cinema more seriously than before.