What Trump's foreign film policy means for Indian cinema: a bleak future and a 100% tariff

Donald Trump’s announcement of a 100% tariff on foreign film production in the United States has sent shockwaves through the global film industry, and India is no exception. While the exact implementation details remain murky, the move threatens to directly impact how Indian films are distributed, screened, and priced in the US — one of their most lucrative overseas markets.

What This Means for Indian Cinema:

1. Spike in Ticket Prices for Indian Films in the US:
   According to trade expert Sreedhar Pillai, a 100% tariff would double the cost of importing an Indian film into the US. If a film was bought for ₹5 crore, the distributor would now need to pay ₹10 crore. This burden is likely to be passed on to audiences, raising ticket prices to $20–30, especially for South Indian blockbusters that already command premium pricing.

2. A Blow to Overseas Collections:
   The US has been a vital overseas market, particularly for South Indian films like Baahubali, RRR, Leo, and Jailer, which have performed exceptionally post-COVID. A tariff-induced price hike could deter audiences and reduce box office revenues significantly.

3. A Hit to Filmmaking Logistics:
   Trump’s move aims to discourage US filmmakers from shooting abroad (e.g., Canada, UK, Europe), but it could also disincentivize Indian filmmakers from planning US releases or collaborations, limiting their global exposure.

4. Policy Vagueness Adds to Uncertainty:
   The lack of clarity—whether the tariff applies to ticket sales, distribution rights, or licensing—means producers and distributors are in a wait-and-watch mode, unable to plan confidently for US releases.

Why the Indian Government Might Not Intervene:

Trade insiders believe that film exports to the US amount to less than ₹300 crore, a fraction compared to other major exports. As Pillai puts it, the Indian film industry is a “peanut industry” compared to sectors like pharmaceuticals or IT, making it unlikely that the Indian government will negotiate on its behalf.

The Only Viable Solution: Internal Restructuring

1. Cutting Film Budgets:
   Especially for those banking heavily on overseas revenues. Lavish productions that expect huge US collections will now be seen as high-risk investments.

2. Reducing Star Salaries:
   This has already been a topic of debate within the industry, especially with OTT platforms offering lower acquisition rates than pre-COVID times.

3. Lowering Overseas Ticket Prices:
   South Indian films charging up to $25 per ticket on opening weekends in the US are no longer sustainable under the new policy. A price correction may help keep audiences interested despite the tariffs.

Industry Sentiment

Producer Anand Pandit called the announcement a blow to global cinema but urged caution until the policy's specifics are clear. He also emphasized that the US should offer incentives, not penalties, if it truly wants to compete with nations offering better production economics.

The Bottom Line:

Trump’s proposed tariff, if enforced, could spell trouble for the Indian film industry’s international ambitions, especially South Indian cinema, which has carved out a solid fanbase in the US. But this may also serve as a wake-up call to re-evaluate unsustainable financial practices and push for leaner, smarter filmmaking strategies.