Donald Trump’s 100% tariff on foreign films will put the industry’s resilience on trial

The US, along with the UK, is a key overseas market for the Indian film industry, especially for Hindi, Tamil, Telugu, and Malayalam films. Together, these two markets account for around 50% of overseas collections, thanks to the widespread Indian diaspora.

Mint explains what is in store for the film industry.

What has Trump said?

Trump has reiterated his threat to impose a 100% tariff on all films not made in the US, claiming American movie-making is losing ground to international competition.

“Our movie-making business has been stolen from the United States of America by other countries, just like stealing candy from a baby,” Trump said on his social-media platform Truth Social on Monday.

This May, the US president said he would talk to Hollywood executives about his plan and begin the process of imposing the levy because America’s film industry was dying “a very fast death”.

The remarks come in the wake of a new wave of tariffs, including a 100% levy on branded or patented drug imports as well as 50% levies on kitchen and bathroom cabinets.

How would the tariffs impact foreign films, including those from India?

Overall, the new US trade measures could significantly disrupt global media companies operating in India by sharply increasing costs through tariffs on exported content and compliance burdens on digital transfers.

Industry experts warn that this could force companies to fundamentally rethink their content production and distribution strategies, potentially impacting profitability, content availability, and consumer pricing.

Although the exact impact remains unclear, such a move could result in increased acquisition costs for Indian distributors and higher ticket prices.

Which specific players are likely to be impacted?

All major film studios, such as Yash Raj Films, Dharma Productions, and Maddock Films, as well as many others in the Hindi and southern markets, depend on the US for a significant portion of their earnings, given that ticket prices are higher overseas.

Major over-the-top (OTT) players and international studios such as Netflix, Amazon Prime Video, Warner Bros, and others that produce and export Indian originals or use Indian vendors for visual effects (VFX), animation, post-production, or content formatting are faced with a cost spiral unless they relocate movie production to the US.

In addition to video content, podcasts, which are subject to nuanced tax treatments based on format and distribution channels, are also likely to be affected.

How has overseas box office fared lately?

Despite global headwinds and the growing popularity of alternative entertainment formats, experts said the film business—both in India and abroad—hinges on the buzz around the titles.

That said, the theatre-going habit has been changing globally since the pandemic, driven by high ticket prices and a lack of compelling content. Over the past few months, with the exception of period drama Chhaava, and later Housefull 5 and Sitaare Zameen Par, not much high-profile Hindi-language content has created a stir in cinemas overseas.

In 2024, Indian films made ₹2,000 crore from overseas markets, according to the annual Ficci-EY Media and Entertainment report.

What could be the long-term implications?

Given the unpredictability of the tariff situation, one can expect that existing contracts will be revisited and new contracts drawn to account for this new unpredictability.

This, however, could have a ripple effect on content production over time, according to some experts. While tariffs may temporarily slow down India’s export momentum, especially for diaspora-focused content, there could be a shift towards co-productions, staggered release models, and enhanced legal and tax structuring to remain globally competitive.