Bollywood braces for Trump tariff blow, industry demands tit-for-tat taxes
Experts also cite a risk that outsourced VFX and post-production — a booming Indian export — could be pulled back into the U.S. if tariff definitions creep into services.
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President Donald Trump’s announcement of a sweeping 100% tariff on movies made outside the United States has sent shockwaves through the global film business, with India’s movie and streaming industries bracing for potential fallout. The Indian Motion Picture Producers’ Association (IMPPA) have called for an emergency committee meeting to assess the implications of President Trump’s proposed 100% tariffs on foreign-made films.
The plan, unveiled on Monday, leaves many details unclear — including what exactly counts as “foreign-made,” how joint productions will be treated, and whether the rules extend to digital imports. But even in its vague form, the move threatens to disrupt one of India’s most lucrative overseas markets: the United States.
“Right now, the announcement is long on rhetoric and short on clarity,” said Vishal Khanna, Founder of Media Pro Research. “What really matters is how enforcement is defined — whether it’s theatrical only, streaming imports, or even outsourced post-production. Each has very different consequences for Indian cinema and global streamers.”
For everyday Indian users of Netflix or Prime Video, little changes in the short term. The tariff applies to imports into the U.S., not India. But the indirect effects could be significant.
“If U.S. licensing costs go up, platforms might cut back on non-U.S. titles in their American catalogues or reshuffle rights deals,” Khanna explained. “That weakens monetization for Indian films in the U.S. diaspora market and could tighten commissioning budgets worldwide.”
Abhay Sinha, President of IMPPA, expressed strong concern over the move, “Producers are impacted heavily due to this decision. The U.S. is one of the most important overseas markets for Indian films, especially for diaspora-driven releases. A tariff of this scale could directly hit our revenues and slow down growth for the industry as a whole."
Sinha said, "We will be writing to the Indian government to escalate this issue and seek reciprocal measures. If Indian cinema is to be taxed unfairly abroad, then U.S. media houses operating in India should also be subjected to similar taxation. This is not just about fairness — it’s about protecting our creative economy and ensuring Indian producers don’t lose their foothold in global markets.”
The U.S. has a large and loyal Indian-origin audience — roughly 5.2 million people — that helps drive overseas revenue. If U.S. economics sour, Indian films may find fewer slots on global platforms, even if Indian pricing itself is unaffected.
The U.S. theatrical market has become essential for Bollywood and South Indian blockbusters. Recent hits such as Coolie grossed $6.2 million in just five days in North America. A 100% tariff would effectively double distribution costs, unless absorbed by distributors, leading to higher ticket prices, fewer screens, or even skipped U.S. releases for mid-budget films.
“When this idea was floated in May, Indian producers warned that as much as 40% of overseas revenue can come from the U.S.,” said Khanna. “That’s not just a financial hit — it changes green-lighting decisions for films aimed at the diaspora.”
Industry analysts also note that sweeping tariffs could face legal challenges in U.S. courts or at the WTO, creating uncertainty that delays release plans.
In the near term, distributors may reroute releases toward Canada, the UK, or the Gulf, or shift straight to PVOD/streaming for North America. Importers are already signaling lower minimum guarantees (MGs) and risk-sharing terms with producers.
Medium-term, Indian studios may explore U.S. co-production structures or even partial shoots/post-production in the U.S. to qualify as “domestic.” But that hinges on how “U.S.-made” is defined. Meanwhile, smaller diaspora-dependent films face the biggest squeeze, while larger event films with strong India-first monetization will likely endure.
There’s also a risk that outsourced VFX and post-production — a booming Indian export — could be pulled back into the U.S. if tariff definitions creep into services.
Yusuf Shaikh, Founder of Janta Cinema and an Executive Committee Member of IMPPA, added that the tariffs appear counterproductive, “It’s difficult to understand what he is trying to achieve by such 100% tariffs. If you look at the data, more Hollywood movies are making money out of India than Indian films are earning at the U.S. box office."
Shaikh further added, "The balance of trade is already tilted in their favour. On top of that, the OTT business of Netflix and Prime is generating far more revenue from Indian subscribers than Indian content is making in the U.S. from diaspora audiences. When Hollywood stopped releasing films in Russia after sanctions, the biggest losers were the studios themselves — they lost access to a massive market overnight. Abrupt decisions like this don’t just disrupt revenue streams; they risk damaging cultural and business ties that have taken years to build.”
Opportunity in Disruption
Yet the disruption may also open new doors for Indian players. Khanna outlined a playbook for how homegrown studios and platforms can adapt:
Capture diaspora demand digitally: Indian OTTs with U.S. apps could offer PVOD or early streaming windows for expatriate audiences.
Leverage co-production arbitrage: Structuring projects with U.S. entities and spend thresholds could unlock tariff exemptions.
Double down on domestic monetization: Build slates with strong India ROI, so U.S. revenue becomes upside, not lifeline.
Expand FAST/AVoD channels: Fill the gap if U.S. streamers shrink foreign film catalogues.
Remaster and export classics: Cost-efficiently monetize evergreen titles for diaspora streaming.
“Every disruption creates arbitrage,” Khanna noted. “Indian players can use this moment to build direct diaspora channels, test co-production models, and strengthen their India-first economics.”
Industry trackers are eyeing key metrics over the next 90 days: U.S. rights MGs compared to 2023–24 levels, screen counts and ticket prices for Indian openings, OTT view-through rates for PVOD pilots, and CPM lifts on diaspora-targeted advertising.
“The bottom line is: Indian subscribers won’t suddenly see a tariff on their Netflix bill,” Khanna said. “But the U.S.-side economics could narrow international film pipelines — a soft headwind for Indian cinema’s global ambitions.”
