Donald Trump deals a blow to Indian films! The proposed 100% tariffs on foreign films by US President Donald Trump presents an unexpected challenge for the Indian film industry, potentially impacting its commercial success and sustainability in a crucial international market, according to industry leaders.
Trump's justification for this measure stems from what he describes as "a very fast death" of the American film industry.
The United States remains a crucial territory for Indian cinema, with a substantial Indian population of approximately 5.2 million, as reported by the Pew Research Centre. Hindi films derive 40-60% of their international earnings from the US, whilst South Indian productions generate between 12-70% of their overseas revenue from this market.
The proposed tariff would require distributors to pay an additional $1 million in taxes when securing US distribution rights for an Indian film valued at $1 million. Industry executives told ET that this could affect production companies that specifically create content for the Indian diaspora.
Senior executives said that production companies would need to reconsider their financial planning and distribution approaches. They warn that any increase in movie ticket prices to compensate for elevated distribution expenses could result in reduced attendance for Indian films at American cinemas, subsequently affecting their revenue performance.
Nevertheless, a White House representative clarified on Monday that the tariff decision remains pending.
Pradeep Dwivedi, group chief executive of Eros International Media, India, noted that if implemented, "the tariff effectively doubles the cost of importing Indian films."
The potential decline in Indian cinema's presence across US theatres could diminish India's cultural influence and soft power through films, Dwivedi said.
Stuart Entertainment's creative director and partner, Adi Tiwary, said: "Thanks to higher ticket prices and better revenue splits, the US market provides 30-50% of net overseas earnings for any successful Indian film on average. So, losing the US territory would be like losing a platinum card in a cash economy."
Karmic Films' co-founder and director, Suniel Wadhwa, explains: "It is critical to understand that this tariff would not exempt production houses that have offices in the US. Films produced outside the US will have to pay a 100% tariff. This will have a far-reaching impact not only on the business of Indian films but also on their budget and production. There must be a result-oriented dialogue between the Indian and the US governments to mitigate risks."
Industry leaders assess that the proposed 100% tariffs on non-US films by the Trump administration has dual objectives. The main intention appears to be a countermeasure against China's limitations on Hollywood film imports, with the tariff's impact concentrated on Indian and Chinese cinema. Additionally, it seeks to address the declining global revenue of Hollywood productions.
Statistics from Box Office Mojo, an American film database, reveal that the total worldwide earnings of 200 Hollywood releases in 2024 amounted to $24.8 billion, showing a 26% decrease compared to the previous year.
With this new tax looming, industry experts anticipate a significant transformation in distribution strategies, particularly expecting more Indian films to opt for immediate streaming platform releases.
Trump's justification for this measure stems from what he describes as "a very fast death" of the American film industry.
The United States remains a crucial territory for Indian cinema, with a substantial Indian population of approximately 5.2 million, as reported by the Pew Research Centre. Hindi films derive 40-60% of their international earnings from the US, whilst South Indian productions generate between 12-70% of their overseas revenue from this market.
The proposed tariff would require distributors to pay an additional $1 million in taxes when securing US distribution rights for an Indian film valued at $1 million. Industry executives told ET that this could affect production companies that specifically create content for the Indian diaspora.
Senior executives said that production companies would need to reconsider their financial planning and distribution approaches. They warn that any increase in movie ticket prices to compensate for elevated distribution expenses could result in reduced attendance for Indian films at American cinemas, subsequently affecting their revenue performance.
Nevertheless, a White House representative clarified on Monday that the tariff decision remains pending.
Pradeep Dwivedi, group chief executive of Eros International Media, India, noted that if implemented, "the tariff effectively doubles the cost of importing Indian films."
The potential decline in Indian cinema's presence across US theatres could diminish India's cultural influence and soft power through films, Dwivedi said.
Stuart Entertainment's creative director and partner, Adi Tiwary, said: "Thanks to higher ticket prices and better revenue splits, the US market provides 30-50% of net overseas earnings for any successful Indian film on average. So, losing the US territory would be like losing a platinum card in a cash economy."
Karmic Films' co-founder and director, Suniel Wadhwa, explains: "It is critical to understand that this tariff would not exempt production houses that have offices in the US. Films produced outside the US will have to pay a 100% tariff. This will have a far-reaching impact not only on the business of Indian films but also on their budget and production. There must be a result-oriented dialogue between the Indian and the US governments to mitigate risks."
Industry leaders assess that the proposed 100% tariffs on non-US films by the Trump administration has dual objectives. The main intention appears to be a countermeasure against China's limitations on Hollywood film imports, with the tariff's impact concentrated on Indian and Chinese cinema. Additionally, it seeks to address the declining global revenue of Hollywood productions.
Statistics from Box Office Mojo, an American film database, reveal that the total worldwide earnings of 200 Hollywood releases in 2024 amounted to $24.8 billion, showing a 26% decrease compared to the previous year.
With this new tax looming, industry experts anticipate a significant transformation in distribution strategies, particularly expecting more Indian films to opt for immediate streaming platform releases.
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