Donald Trump's recent threat to impose a 100% tariff on all movies produced outside the United States has sent shockwaves through the Indian film industry, raising serious concerns about the future of Indian movies and streaming content in the U.S. market. This move, ostensibly aimed at protecting the American film industry, could have far-reaching and potentially devastating consequences for Indian cinema's presence and revenue in one of its key overseas markets.

The U.S. has emerged as a significant contributor to the international film business of India, particularly for Bollywood and South Indian films that have a strong appeal to the Indian diaspora. Industry estimates suggest that the U.S. alone accounts for 5-7% of the overall revenue for Indian films, with overseas territories combined contributing up to 20%. This "meaningful percentage," while perhaps not enough to make or break the industry, is substantial enough to cause significant harm if disrupted. The Indian diaspora in the U.S., estimated at 5.2 million people, forms the bedrock of Indian cinema's overseas theatrical success.

If Trump's proposed tariff is implemented, it would effectively double the cost of importing Indian films into the U.S. For instance, if a U.S. distributor purchases the rights to screen an Indian film for $1 million, they would now have to pay an additional $1 million as a tariff, bringing their total investment to $2 million. In an industry where profit margins are already tight, this additional financial burden could make it economically unviable to import and screen Indian films in the U.S.

Several industry experts and filmmakers have voiced their concerns about the potential impact of the tariff. Shibasish Sarkar, President of the Producers Guild of India, stated that the 100% tariff would affect any revenue generated by Indian films in the U.S. market and would likely lead to a decline in foot traffic in theaters due to increased ticket prices. Filmmaker Vivek Agnihotri echoed these concerns, predicting that a doubling of ticket prices would deter audiences from watching Indian movies in U.S. theaters.

One of the most immediate consequences of the tariff could be a significant reduction in the number of Indian films released in U.S. cinemas. Distributors may hesitate to acquire new titles, and existing agreements could be jeopardized, leading to potential losses. As Vishnu Manchu, an actor-producer, pointed out, Indian cinema already operates on tight economics in the U.S. market, and the tariff would eliminate any breathing room, potentially causing theatrical releases to vanish overnight.

The impact of the tariff may not be limited to theatrical releases. There are concerns that it could extend to streaming and over-the-top (OTT) content, which has become a major revenue source for Indian producers abroad. If the tariff applies to digital distribution, major platforms like Netflix and Amazon Prime Video could rethink their investments in Indian content for the U.S. market, scaling back the growing exposure Indian films have been enjoying internationally.

To mitigate the potential losses from the U.S. market, Indian distributors are exploring alternative markets and strategies. Akshay Rathi, a film exhibitor, suggested that various parts of North America with a strong presence of Indian language speakers could be targeted. However, some industry experts caution that relying solely on the domestic market or other overseas territories may not be sufficient to offset the losses from the U.S.

Despite the concerns, some industry insiders believe that the impact of the tariff may be minimal. Shrirang Nargund, an independent media and entertainment consultant, noted that only a small percentage of the films produced in India each year are released in the U.S., and only a few of those do well. Girish Johar, a producer and film business expert, suggested that the tariff may primarily target film production outside the U.S., rather than the exhibition business, and that its impact on ticket prices may be limited.

While the details of Trump's proposed tariff remain unclear and its implementation uncertain, the threat has undoubtedly created a sense of anxiety and uncertainty within the Indian film industry. The industry is bracing itself for potential disruptions to its U.S. business, reduced revenue, and a possible shift in distribution strategies. The coming months will be crucial in determining the extent of the damage and the long-term impact on Indian cinema's success in the U.S.