Given the enormous opportunity to unleash the potential of the M&E industry, the Government of India recently announced an incentive scheme for audio-visual co-production and foreign film shooting in India
The Indian Media and Entertainment (M&E) industry has emerged as a globally recognised market with a revenue of around $30 billion. With over 900 million internet subscribers, 600 million smartphone users, 500 million active social media users, 900 TV channels, 510 million gamers, and 1.2 billion mobile subscribers, M&E in India offers to boost economic growth and job creation exponentially.
The Government of India has identified the audio visual services as a champion sector and looking at the immense opportunity it offers to unleash the potential of the M&E Industry, the Government of India recently announced an incentive scheme for audio-visual co-production and shooting of foreign films in India.
India has Audio Visual Co-production treaties with 15 countries, including Canada, and therefore, global collaborations with India will get an impetus to this sector. It will also attract investment from foreign film makers and help to promote India as a filming destination.
The Incentive Scheme will be executed through Film Facilitation Office (FFO) under the aegis of National Film Development Corporation (NFDC). Some of the salient features of the scheme are:
1. For all qualifying projects, the international film production company can claim a payable cash incentive of upto 30% on Qualifying Expenditure in India subject to a maximum of INR 2 crore (USD 260,000).
2. In case of foreign films shootings in India, an additional 5% bonus upto a maximum of INR 50 lakhs (USD 65,000) as additional reimbursement would be granted for employing 15% or more manpower in India.
Incentives of the schemes can be claimed under either of the Schemes and not for both.
To be eligible for the scheme the filmmakers need to ensure that the project must have been granted the “Co-Production” status by the Ministry of I&B and the participating country must fall under one of India’s official bi-lateral co-production treaties on Audio-Visual Co-production. Projects that have been granted official Co-production Status after May 1, 2022 are eligible for the incentive.
International productions that have been granted shooting permission by the Ministry of Information & Broadcasting and Ministry of External Affairs (for documentaries only) after May 1, 2022 are also eligible for the incentive.
As far as the disbursement mechanism is concerned, the Incentives will be disbursed in two stage—Interim and Final. The Final disbursement claim can be made only once the project is complete in India, as per the guidelines under the scheme. Incentives are provided on the recommendation of a Special Incentive Evaluation Committee.
With a burgeoning middle class of tech-savvy buyers as well as thriving innovation industries, the Indian M&E industry is going through a huge transformation, exponential growth and presents an opportunity to excel in almost every M&E vertical including Films,TV, Print, Digital Advertising, Animation, VFX, Gaming, Comics, OOH, Radio and Music.
The movie industry in India is big business and box office revenues are growing steadily. The best opportunities for multinational businesses, however, are more likely found in joint “Bollywood”production projects, rather than in licensing or exporting movies. Electronic home video is expanding rapidly, especially streaming content for a monthly flat rate.
The all-inclusive, unlimited subscription model is gaining in popularity as digital entertainment expands in India just like in many developing economies. Live music and digital music streaming are proliferating in India. Video games, including PC, app-based, digital, and online consoles are also growing rapidly.
The Indian content on screen reaches over 90 countries in all major OTT platforms, including Netflix,Prime Video, iTunes, YouTube. This is just the tip of the iceberg and is set to increase in the coming years. After Hollywood, Indian cinema has the highest reach (in terms of distribution for films) and India’s strength lies in emotional content — telling human stories with universal appeal, irrespective of the language barrier.
Content produced for Indian media sectors holds tremendous potential for global consumption. With a significant diaspora population residing overseas, Indian content is a key tool for these communities to connect with their cultural roots.
Over the last few years, several international filmmakers have shown interest in India as a filming destination owing to its world-class film studios and diversified locations depicting cultural vibrancy,heritage, aesthetic appeal, etc.
Particularly when it comes to Animation, Visual Effects and Gaming sectors, where the dependence on skilled and semi-skilled jobs are plenty, it is prudent that the companies should adapt to the outsourcing model to remain relevant in their respective sectors.
India is rapidly becoming the premier “digital engine room” for the world. With new M&E policy on the anvil and the creation of an AVGC Promotion Task Force that was constituted following the announcement made in theUnion Budget 2022 earlier this year to boost growth of the sector, the service sector for animation VFX and games can double its export growth.The horizon use cases of AVGC – XR verticals have expanded beyond its day to day defined utility in Architecture, Life Science, Legal, Education, Industrial, Urban Planning, Sports, Digital universe, Metaverseetc apart from media & entertainment.
Currently, India is ranked fourth in the global audio visual exports in the world. India’s total exports account for $300 billion. More than 70 per cent of the AVGC revenues comes from AVGC services to the global markets. The AVGC sector in India is poised to drive a similar growth to what the IT industry saw 20 years ago. Audiovisual exports in the next five to 10 years will be amongst the top 5 sectors contributing to India’s GDP.