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Donald Trump’s threat to impose a 100 per cent tariff on all movies made outside America has left the world’s largest film industry in India wondering how deep the impact could be.
The US president wrote on his Truth Social platform on 5 May that incentives offered by foreign countries that enabled their filmmakers and studios to film elsewhere were “a national security threat” in addition to being “messaging and propaganda”.
Bollywood filmmaker Vikram Bhatt called it a “kneejerk” reaction while veteran producer Mukesh Bhatt described the move as “wrong business”.
Neither, however, foresaw much damage to the Indian film industry, given a majority of its movies were not shot in the US.
“In India, we make films for the Indian diaspora. To release in America, I would need to shoot in America, which I never will,” Mukesh Bhatt told The Times of India.
“America is the most expensive country on the planet. Even a Hollywood producer can't afford to shoot in America. You’re not helping, you're destroying Hollywood.”
Dangal, a 2016 Hindi biopic starring Aamir Khan as the father and coach to female wrestlers Geeta Phogat and Babita Kumari, earned about £9.32m in the US and Canada, according to Box Office India. In contrast, it made £47.4m in India, showing that while the foreign revenue was significant, it wasn’t the most dominant.
Similarly, Baahubali 2 (2017), RRR (2022), which won the Oscar for best original song, and superstar Shah Rukh Khan’s Pathaan (2023), raked in between £6.7m and 11.2m in the US market out of over £88.1m globally, the bulk of it in India.
According to a report released by the Federation of Indian Chambers of Commerce and Industry and EY in March, India generated a domestic theatrical revenue of £1bn in 2024 as against total overseas theatrical revenue of £176.3m. In the previous year, according to the Motion Picture Association and Deloitte, India had maintained its position as the largest producer of films in the world, releasing nearly 2,000 titles in various languages.
“The US is a reasonably important market for our major films, so there are definitely concerns,” Nitin Tej Ahuja, CEO of the Producers Guild of India, told The Independent about the Trump tariff.
“But the domestic Indian market is by far the mainstay of our business. Ironically, it’s Hollywood that has more reason to be worried.”
Filmmaker Shekhar Kapur, known for such movies as Bandit Queen and Elizabeth, noted that “over 75 per cent of the box office of Hollywood films comes from outside the US.”
If the new levy were to drive up costs for foreign studios trying to enter the US market, he argued, American studios might be incentivised to shoot abroad even more, not less.
“President Trump’s imposition of 100 per cent tariffs may encourage Hollywood to move outside the US. Quite the opposite of what he intended.”
Still, America is a significant market for Hindi, Telugu and Tamil films in particular. Shibasish Sarkar, CEO of Reliance Studios and president of the Producers Guild of India, told The Independent that Indian films grossed about £75.1m annually at the US box office.
“Overseas theatrical roughly accounts for 20 per cent of total revenue. For Hindi films, the US contributes 35-40 per cent of that. For Telugu cinema, the US can be as much as 75-80 per cent of their overseas revenue,” he explained. “So, depending on language, the US market accounts for anywhere between 7 per cent and 16 per cent of a film’s overall revenue.”
That “meaningful percentage”, he added, was not enough to make or break the industry, but it could be substantial enough to hurt.
The US, a Pew Research Center analysis estimates, is home to 5.2 million people of Indian origin. It is this diaspora that is the bedrock of Indian cinema’s overseas theatrical success.
Vishnu Manchu, whose New Zealand-shot historical epic Kannappa hits theatres this June, pointed out that the US market already offered little breathing room for Indian producers.
“Indian cinema doesn’t operate on high profit margins in the US to begin with. We’re already working with tight economics,” the actor-producer said.
He noted that the total revenue of all Indian films released in the US was between £75m to 110m a year. “That is generous,” he added. “If this 100 per cent tariff is really implemented, Indian films will likely go straight to digital. Theatrical releases in the US just won’t be feasible anymore – they’ll vanish overnight.”
He also warned that co-productions could suffer. “One of the key drivers of Indo-American collaborations has been mutual economic benefit,” he said. “If tariffs disrupt that balance, producers may think twice before green-lighting co-productions.”
The timing of the proposed tariff is also not ideal coming as it does when the Indian film industry is still recovering from the pandemic slump.
“We’re yet to return to pre-Covid footfall levels,” Sarkar told The Independent. “We have probably recovered 80-85 per cent of pre-pandemic business in India, whereas the US is still at 70-75 per cent. So, we’ve bounced back faster, but we’re not fully there yet.”
At the same time, India’s theatre sector is under pressure. PVR Inox, the country's largest multiplex chain, reported a net loss of £24.68m in FY25, a substantial increase from £2.8m in FY24, according to the company’s exchange filings in May 2025.
Additionally, Sarkar pointed out several infrastructural problems in the Indian film industry that the proposed tariff would not help.
“India has 9,000-10,000 screens for a population of 1.45 billion. The US has around 40,000, China nearly 90,000,” he told The Independent. “There’s massive room for investment in exhibition infrastructure, especially in tier-2 and tier-3 cities.”
Moreover, lack of institutional capital, a longstanding problem in the Indian film sector, continued to hinder growth. “There’s no ecosystem for studio-grade infrastructure here, except maybe Ramoji Film City in Hyderabad,” he said. “We’re still heavily dependent on private capital and passion.”
English (US) ·