Donald Trump's Film Tariff Puts Bollywood's US Presence at Risk

US President Donald Trump's proposal to impose 100% tariffs on foreign films is a surprise twist in the plot for the Indian film industry, threatening its box office prospects and overall viability in a key overseas market, according to senior executives.

The move, prompted by "a very fast death" of the American film industry, according to Trump, would force production companies to rethink budgets and release strategies, according to executives. Any move to raise ticket prices to offset higher distribution costs could reduce footfall for Indian films in US theaters, reducing their box office potential, they warned.

However, a White House spokesman said Monday that no final decision had been made on the tariff. If implemented, "the tariff effectively doubles the cost of importing Indian films," said Pradeep Dwivedi, group CEO of Eros International Media in India.

Two goals

"A reduction in Indian film presence in US theatres could reduce India's soft power and cultural influence through cinema," said Dwivedi, who runs Eros.

Given the size of the Indian diaspora in the United States (5.2 million, according to the Pew Research Center), it has historically been a critical market for Indian films. For Hindi films, it accounts for 40-60% of total overseas revenue, whereas for southern films, it ranges from 12-70%.

"Due to higher ticket prices and better revenue splits, the US market accounts for 30-50% of net overseas earnings for any successful Indian film on average. "So, losing the US territory would be like losing a platinum card in a cash economy," said Adi Tiwary, creative director and partner at Stuart Entertainment," an Australian film distributor.

If the new tariff is implemented, a distributor will have to pay an additional $1 million in taxes, for example, if they purchase US distribution rights to an Indian film for $1 million. According to industry executives, this could have a long-term impact on the business of production houses that create content for the Indian diaspora.

"It is critical to understand that this tariff does not exempt production houses with offices in the United States." Suniel Wadhwa, a veteran film distributor, and cofounder and director at Karmic Films, stated that films produced outside of the United States will be subject to a 100% tariff. "This will have far-reaching consequences not only for the business of Indian cinema, but also for its budget and production. To mitigate risks, the Indian and US governments must engage in a results-oriented dialogue."

According to industry executives, the Trump administration's proposal to impose 100% tariffs on non-US films aims to achieve two goals. First, it responds to China's policy of restricting Hollywood film imports, as the tariff primarily affects Indian and Chinese markets. Second, it seeks to reverse the continued decline in the global box office performance of Hollywood movies.

According to the American movie database Box Office Mojo, the total global collection of 200 Hollywood films released in 2024 was $24.8 billion, a 26% year-on-year decrease.

As the industry prepares for the new levy, executives predict that the tariff will result in an increase in direct-to-streaming releases of Indian films.