inCEnTivES TO pROmOTE GROw Th

The effort is to attract more productions and have a healthy mix of both big budget and independent projects coming to India

India has announced a scheme of incentives for foreign films and official audio visual co-productions with foreign countries

The incentives include reimbursement of 30% of Qualifying Production Expenditure (QPE) incurred in India subject to a cap of Rs 20 Million (approx.US$ 244,000).

The Scheme encourages film production in India including Animation, Post Production and Visual Effects.

India has bilateral Audio Visual Co-Production treaties with 16 countries including Australia, Bangladesh, Brazil, Canada, China, France, Germany, Italy, Israel,Korea, New Zealand, Poland, Portugal, Russia, Spain, and United Kingdom.

Substantial incentives are being offered by the States in India. Incentive amounts of some states include Rs ₹ 30 mn by Delhi, ₹ 10 mn by Sikkim, ₹20 mn by UP,₹25 mn by Karnataka and ₹15 mn by Uttarakhand.

The functions of the FFO have been taken over by Invest India which is India’s Investment Promotion Organisation from 1st January 2023. Invest India has a global footprint working with Indian missions, works with a wide range of foreign embassies and also have connect with the states to facilitate investment conversations.

The foreign film producer based outside India need not be liable for GST under provisions of Section 13(2) of the IGST Act, 2017.

Typically for a $ 1.2 mn spend in India, the incentives can be from $ 0.3 mn to even reaching upto $ 0.8 mn

The government is making efforts to attract Marquee projects which fall under the medium to big budget category.

The government is working on the recommendations of the AVGC task force and many initiatives have been announced in regard to promoting the AVGC Sector ecosystem.

As the first point of contact for global companies, Invest India helps in generating leads through its world wide network and for providing handholding support for companies desirous of investing in India’s media and entertainment sector.

The FFO web portal is being revamped for integrated online facilitations, permissions and incentives processes for the National Level as well as state level. The existing online mechanisms will be onboarded and states would be provided sandbox to customise and adopt the online processes. This would truly unravel the experience of customised single window clearance for the film facilitation. AVGC Task Force report has been accepted at the Ministry level and it is being taken to the cabinet. The gaming industry, whose world-wide worth is $300 billion, has a huge scope in India for growth in content creation and innovation. A lot of content is getting created in India and incentives will be given for the animation and visual effects industry and the postproduction done in India.

“The media and entertainment sector in India showcases India’s fast expanding creative economy, and as the industry’s partner and facilitator the Information & Broadcasting Ministry continues to undertake efforts to grow the sector to reach the target of US $70 billion by the year 2030 from its current size of US $30 billion as of today. Digital technology, specifically gaming, OTT and digital advertising have a critical role to play as drivers and are expected to contribute to 2/3rd of this growth,” said Union Information & Broadcasting Minister and Youth Affairs & Sports Minister Anurag Singh Thakur.

“India is already a hub for film postproduction works and the country should now try to become a hub for global content creation. We have everything to become a content creation hub,” he added.

India’s Information & Broadcasting Ministry continues to undertake efforts to grow the media and entertainment sector. Various initiatives have been taken in the past few years to invite filmmakers from across the world to come to India and collaborate with Indian filmmakers.

“The idea is to support and grow innovation and production capabilities of our people so that the Indian film industry can expand beyond borders and cause ripples in world cinema,” said Thakur. “The Indian film industry produces the highest number of films in the world and we should work together for India to become the content hub of the world,” the minister added as he underscored the government’s vision for the Indian audio-visual sector.

Collaboration for Global Stories

India has been entering into Audio-Visual Coproduction Agreements (AVCAs) with many of the leading film producing countries and markets since 2005 with the first bilateral AVCA signed between India and Italy. Since then, India has signed AVCAs with 16 countries, including 10 G20 nations such as Australia, Brazil, Canada, China, France, Germany, Italy, Republic of Korea, Russia, and the United Kingdom. These agreements have enabled filmmakers and professionals from different countries to collaborate, share resources, and access incentives schemes. India has granted official coproduction status to 14 films in the past seven years, including the Indo-French treaty co-production, ‘lunchbox,’ which was a critical and commercial success.

“Co-Producing films can help not only bring together talent and technology, but they also give access to finances, better stories and last but not the least better access to markets. India has been entering into AVCAs with many of the leading film producing countries and markets since 2005 with the first bilateral AVCA signed between India and Italy. Since then we have entered into agreements with 16 countries the latest being Australia,” said Apurva Chandra, Secretary, I&B, Government of India.

The Film Bazaar, which is the Film Market associated with the annual International Film Festival of India held in Goa has a CoProduction market which give a platform to Indian producers to find suitable international co-producers for their projects in the form of financial assistance, location support, or post-production facilities. The CPM which started in 2007 has become one of the main attractions of Film Bazaar and many major international projects have come as a result of the Co Production Market at Film Bazaar.

India is in negotiations with many leading countries both with a vibrant film industry as well as with developed markets and interest for films to conclude bilateral AVCAs so that the scope of collaboration for our young and diverse talent is that much widened.

Incentivizing Creativity

It has been almost a year since the government of India announced the scheme of Incentives for Production of Foreign Films in India as well as Incentives for Audio Visual Co-Productions with Foreign Countries. All qualifying Co productions are eligible to claim a reimbursement of upto 30% of their qualifying expenditure in India apart from the tax credits of the GST. Similar incentives exist in the other co-producing country.

The post production incentives (also 30%) available include post production spends including creation using animation and visual effects, besides the incentives for film shooting in India.

Since announcement of the scheme in May 2023, one incentive application has been disbursed, 3 projects have been given interim approval of which one is being audited and the other two are awaiting final documents. Two other applications are under various stages of approval.

Substantial incentives are being offered by the States in India. Incentive amounts of some states include Rs ₹ 30 mn by Delhi, ₹ 10 mn by Sikkim, ₹20 mn by UP, ₹25 mn by Karnataka and ₹15 mn by Uttarakhand. Moreover, if the foreign film producer is based outside India, they need not be liable for GST under provisions of Section 13(2) of the IGST Act, 2017.

Policy and Regulatory Support

The government’s policies and initiatives have played a significant role in the growth of the sector, making it one of the fastestgrowing industries in India. India is also committed to ensuring ease of doing business in the sector. The Film Facilitation Office (FFO) has been set up to act as a single point of contact for anything related to filming permissions and facilitations.

“FFO serves as a one-stop shop for getting filming clearances across India’s stunning landscapes, in keeping with the Indian government’s ‘ease of doing business’ strategy. India has become an appealing option for international partners seeking endless expansion prospects by having top-tier creative talent and manufacturing facilities readily available,” said Dr. l Murugan, Minister of State for Information and Broadcasting and Fisheries, Animal Husbandry and Dairying.

The functions of the FFO have been taken over by Invest India which is India’s investment promotion organisation from January 1, 2023. Invest India has a global footprint working with Indian missions, works with a wide range of foreign embassies and also have connect with the states to facilitate investment conversations.

Since its inception, the FFO has facilitated more than 170 foreign productions directly of which 14 are official co-productions.

The average time taken for shooting permissions has been 21 days, substantially better than the policy commitment of1 month. Further, with invest India, the FFO webportal is being revamped for integrated online facilitations, permissions and incentives processes for the National level as well as state level.

AVGC - Opportunity Next

India has emerged as one of the focal points of the world Animation, Visual Effects, Gaming & Comics (AVGC) industry, and the government is taking steps to promote this sector further. An AVGC Task force was formed in April last year, and its recommendations will instill growth in this sector in India, making it a global hub of AVGC.

The government is also exploring ways to incorporate the Post-Production, Digital, and Video Effects sector under the scope of AV Coproduction Agreements, as well as looking at ways for this sector to benefit from collaborations through bilateral treaties.

The government is also looking at tweaking the incentives scheme to attract marquee projects and bigbudget productions.

The government’s policy and regulatory support to the Media and Entertainment industry have been pivotal in its growth. The government is committed to working alongside the industry to set up more institutes to bring more manpower into the sector.

The government is also exploring ways to introduce AVGC in school curricula so that students are exposed to this growing and exciting sector from an early age. The establishment of a National Centre for Excellence in Mumbai next year is a testament to the government’s commitment to making India a global leader in the AVGC industry.

Keeping in mind the demands of the stakeholders in the industry, the government has come up with the Cinematograph Act 2023 as per the best international practices to keep a check on piracy. The Act is expected to be passed by the Parliamentvery soon.