Navigating India’s New Film Incentive Program: A Game-Changer for International Productions

international production; film production

Introduction

The Indian film industry, already a global powerhouse, is set to become an even more attractive destination for international filmmakers.

In a significant move, the Ministry of Information & Broadcasting has launched a new film incentive program and has increased the incentive for foreign film production from 30% to 40%.

This enhancement means that foreign film producers will now receive 40% of the expenses incurred, with a raised cap limit of 3.5 Mn USD (equivalent to INR 30 crore), along with an additional 5% bonus for Significant Indian Content (SIC).

This strategic move is poised to further propel India’s endeavors to attract medium and large-scale international film projects to the nation.

Key Highlights of the New Incentive Program

The Incentives Scheme for the Production of Foreign Films was initially announced in Cannes in May 2022 and offered a reimbursement of up to 30% of the qualifying expenses incurred for film production in the country, capped at a figure of INR 2.5 Crore. (approx. $300K USD)

In the recent announcement in November 2023, the Ministry of I&B has further enhanced the production incentives to 40% of the production expenses. The cap on qualifying spend has also been substantially increased from $300K USD to $3.6Mn USD (INR 30 Crore).

Administered by the Film Facilitation Office, this program covers live shoots, animations, post-production, and visual effects services. This major financial boost is set to attract a plethora of international productions to India’s diverse landscapes and state-of-the-art facilities.

Eligibility Criteria Simplified

  • Type of Productions: Includes live shoots, animations, post-production, and visual effects.
  • Geographical Requirement: Majority of the production should take place in India.
  • Compliance: Adherence to Indian laws and regulations, including labor laws and safety standards.
  • Minimum Spend: A specified minimum amount of production expenditure must be incurred in India.

Application Process: Step by Step

  • Initial Contact: Reach out to the Film Facilitation Office to express interest.
  • Submission of Details: Provide project details, including script, budget, and production schedule.
  • Documentation: Submit all required documents as per the checklist provided by the office.
  • Evaluation: The application and project are evaluated for eligibility.
  • Approval and Agreement: Once approved, an agreement is signed detailing the incentive terms.

Understanding Qualifying Expenditures

  • Eligible Costs: Includes costs related to on-ground production, hiring local talent and crew, equipment rental, and location fees.
  • Expenditure in India: Only costs incurred in India are eligible for the incentive.
  • Verification: Expenses must be verified and audited as per the guidelines.

Exclusions and General Guidelines

  • Non-Qualifying Costs: International travel, marketing expenses, and overhead costs are typically not covered.
  • Cap on Incentive: Maximum incentive capped at approximately $3.59 million USD.
  • Compliance: Must comply with all applicable Indian laws and regulations.

Essential Documentation Checklist

  • Project Proposal: Detailed proposal including synopsis, budget, and production plan.
  • Financial Records: Proof of financial stability and funding sources.
  • Legal Documents: Contracts, agreements, and necessary permissions.
  • Audit Reports: For expense verification and validation.

FAQs: Your Questions Answered

  • How is the incentive percentage calculated?: Based on qualifying Indian production expenditures.
  • Can the incentive be combined with other subsidies?: Depends on the terms of other subsidies; usually, this incentive is exclusive.
  • What is the timeframe for receiving the incentive?: Post-production completion and audit verification.
  • Are co-productions eligible?: Yes, if they meet the eligibility criteria.

By understanding these points, production and strategy professionals can get a complete picture of how to effectively navigate and benefit from India’s new film incentive program.

Relevant References and Contacts

Ministry of Information and Broadcasting

  • Website: www.mib.gov.in

Film Facilitation Office (FFO)

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