Mumbai: US President Donald Trump's proposal to slap 100% tariffs on foreign films spells a sudden twist in the plot for the Indian film industry that threatens to hurt its box office prospects and overall viability in a key overseas market, said senior executives.
The move, prompted by "a very fast death" of the American film industry, according to Trump, would force production houses to reassess budgets and release strategies, according to the executives. Any move to raise ticket prices to offset higher distribution costs could reduce footfall for Indian films in the US theatres and dent their box office potential, they said.
However, a White House spokesman on Monday said there was no final decision yet on the tariff.
If implemented, "the tariff effectively doubles the cost of importing Indian films," said Pradeep Dwivedi, group chief executive of Eros International Media, India.
Two goals
"A reduction in Indian film presence in US theatres could reduce India's soft power and cultural influence through cinema," said Dwivedi of Eros.
The US has historically been a critical market for Indian films, given the sizeable Indian diaspora - about 5.2 million, according to the Pew Research Center. For Hindi films, it accounts for 40-60% of the total overseas revenue, while for southern films, the share ranges from 12-70%.
"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," said Adi Tiwary, creative director and partner, Stuart Entertainment, an Australia-based film distributor.
If the new tariff is imposed, a distributor will have to cough up an additional $1 million in taxes, for example, for acquiring US distribution rights to an Indian film for $1 million. In the long run, this could affect the business of production houses that create content with the Indian diaspora in mind, according to industry executives.
"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," said Suniel Wadhwa, a veteran film distributor, and cofounder and director at Karmic Films. "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 executives believe the Trump administration is aiming to accomplish two goals with the proposal to impose 100% tariffs on non-US films. First, it serves as a response to China's policy of restricting the import of Hollywood films, as the tariff primarily affects the Indian and Chinese markets. Second, it aims to stem the continued decline in the global box office performance of Hollywood films.
According to data from the American movie database Box Office Mojo, the cumulative worldwide collection of 200 Hollywood films released in 2024 was $24.8 billion, a 26% year-on-year decline.
As the industry stares at the fresh levy, executives said a notable shift the tariff is expected to trigger is an increase in direct-to-streaming releases of Indian films.
The move, prompted by "a very fast death" of the American film industry, according to Trump, would force production houses to reassess budgets and release strategies, according to the executives. Any move to raise ticket prices to offset higher distribution costs could reduce footfall for Indian films in the US theatres and dent their box office potential, they said.
However, a White House spokesman on Monday said there was no final decision yet on the tariff.
If implemented, "the tariff effectively doubles the cost of importing Indian films," said Pradeep Dwivedi, group chief executive of Eros International Media, India.
Two goals
"A reduction in Indian film presence in US theatres could reduce India's soft power and cultural influence through cinema," said Dwivedi of Eros.
The US has historically been a critical market for Indian films, given the sizeable Indian diaspora - about 5.2 million, according to the Pew Research Center. For Hindi films, it accounts for 40-60% of the total overseas revenue, while for southern films, the share ranges from 12-70%.
"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," said Adi Tiwary, creative director and partner, Stuart Entertainment, an Australia-based film distributor.
If the new tariff is imposed, a distributor will have to cough up an additional $1 million in taxes, for example, for acquiring US distribution rights to an Indian film for $1 million. In the long run, this could affect the business of production houses that create content with the Indian diaspora in mind, according to industry executives.
"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," said Suniel Wadhwa, a veteran film distributor, and cofounder and director at Karmic Films. "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 executives believe the Trump administration is aiming to accomplish two goals with the proposal to impose 100% tariffs on non-US films. First, it serves as a response to China's policy of restricting the import of Hollywood films, as the tariff primarily affects the Indian and Chinese markets. Second, it aims to stem the continued decline in the global box office performance of Hollywood films.
According to data from the American movie database Box Office Mojo, the cumulative worldwide collection of 200 Hollywood films released in 2024 was $24.8 billion, a 26% year-on-year decline.
As the industry stares at the fresh levy, executives said a notable shift the tariff is expected to trigger is an increase in direct-to-streaming releases of Indian films.
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