US tariffs to cost Indian films, OTTS

NEW DELHI: US President Donald Trump's punitive tariff proposal to force American movie industry to make films locally could leave the global media and entertainment giants operating in India in a big quan-dary, analysts said.

Under the proposed 100% US tariff on "foreign-made films," exporting such content from India to the US could double the landed cost of post-produced masters that are completed in India but monetized in America, eroding margins or forcing price hikes for audiences. A uni-versal 10% baseline tariff on audio-visual imports, effective 10 April 2025, adds immediate additional costs unless projects can be re-flagged as US co-pro-ductions.

Platforms that have invested heavily in Indian originals with cross-border appeal may face cost escalation unless they can restructure their productions with a US co-production or find other workarounds. This may force a re-evaluation of green-lighting certain projects, espe cially mid-budget titles that rely on international streaming rev-enues to break even.

"Overall, the new US trade measures could significantly disrupt all the global media companies operating in India by sharply increasing costs through tariffs on exported con-tent and compliance burdens on digital transfers. This may also push these companies to fundamentally reshape content production and distribution strategies, potentially affecting profitability, content availabil ity, and pricing for consumers," Dulles Krishnan, vice-president, GTM (go-to-market)-India, Avalara, which delivers cloud based compliance solutions forvarious transaction taxes, said. 

Major OTT players and inter national studios like 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 format-ting are faced with a cost spiral unless they relocate movie-pro-duction to the US.

Other than video content, podcasts, which encounter nuanced tax treatments based on format and distribution channels, are also likely to be affected, Krishnan added.

Audio-only podcasts pro-duced in India and distributed through US platforms like Spo-tify or Apple Podcasts typically generate revenue through sub-scription fees and advertising. Subscription revenue often ben-efits from favourable tax treat-ment as business profits under Article 7 of the India-US Double Taxation Avoidance Treaty, pro-vided the Indian entity does not have a US permanent establish ment, Krishnan said.

However, according to Krish-nan, any advertising revenue-especially when targeted at US listeners often triggers com-plex sourcing rules and could result in taxable US-source income. To be sure, tariff changes will almost certainly lead to more back-and-forth in deal structuring, along with heightened documentation and legal review cycles.