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On May 4, 2025, U.S. President Donald Trump announced plans to impose a 100% tariff on all films produced outside the United States. This move aims to protect the American film industry, which Trump described as “dying a very fast death” due to foreign incentives attracting U.S. filmmakers abroad.
As per the movie database Box Office Mojo, 200 Hollywood films released in 2024 collectively earned $24.8 billion worldwide. That might seem like a big number, but actually it’s a 26% year-on-year decline. Research has also indicated that spending on production in America fell 28% between 2021 and 2024. Moreover, filming in Los Angeles reduced by 22%.
Impact on Indian Cinema
The United States is a significant market for Indian films, contributing approximately ₹800 crore to ₹1,000 crore annually. For Hindi films, the U.S. accounts for 40-60% of overseas revenue, while South Indian films derive 12-70% from this market.
India has a strong diaspora, and around 5.2 million live in the United States. Films have always been a part of the Indian DNA, regardless of where you live. The U.S. market contributes ₹800 crore-1,000 crore a year to the Indian film industry. For Hindi films, the U.S. brings in 40-60% of its overseas revenue.
The proposed tariff could double the cost of distributing Indian films in the U.S., potentially leading to higher ticket prices and reduced audience turnout. This would not only affect box office revenues but also diminish the global reach and soft power of Indian cinema.
Industry Reactions and Concerns
Indian filmmakers have expressed concern over the potential tariffs. Producer Mukesh Bhatt noted that shooting in the U.S. is already expensive, and the additional costs could deter filmmakers from choosing American locations. Director Vivek Agnihotri highlighted that Indian films like “RRR” have started gaining popularity among non-Indian audiences, and the tariffs could hinder this growing international appeal.
Global Film Production Trends
Many American productions have shifted filming to countries like Canada, the U.K., and Australia, attracted by favorable tax incentives. For instance, Canada offers up to a 28% tax credit for productions hiring local crews, and Italy provides tax credits up to €18 million for international co-productions. India also offers a 30% reimbursement on qualifying production expenditures for foreign-owned projects.
Uncertainties and Future Outlook
The specifics of the tariff implementation remain unclear, including whether it will apply to American productions filmed abroad or only to foreign films released in the U.S. The lack of detailed guidelines has created uncertainty within the industry.
While the tariffs aim to bolster the U.S. film industry, they may inadvertently harm international collaborations and the global exchange of cinematic content. The Indian film industry, in particular, faces potential revenue losses and reduced international exposure. Trump’s 100% tariff on non-American films might end up doubling ticket prices and affecting Hindi films released in the U.S., which is its biggest overseas market.
As the situation develops, stakeholders in the Indian film industry are closely monitoring the policy’s implementation and exploring alternative markets to mitigate potential impacts.
