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India Poised to Create Film Production Incentives (EXCLUSIVE)

India is within weeks of establishing a scheme of location shooting incentives that could help put the world’s most prolific filmmaking nation on the map for international film productions.

The country is seeking to create a rebate scheme that could give feature films shot in India a 30% discount. It would be matched by another scheme helping international co-productions.

Both moves are conditional on the continuation of the Narendra Modi-headed government, which is currently seeking re-election. Election results will be known on May 23 and the film industry support measures could be announced shortly thereafter.

Speaking in Cannes, Amit Khare, secretary, Ministry of Information and Broadcasting, told Variety that the Modi government will likely categorize the media and entertainment sector as one of a dozen “champion sectors” capable of delivering above-average growth, and in need of encouragement. He outlined the planned production incentive schemes and hinted at further possible tax cuts for the sector.

While details are yet to be finalized, Khare said that qualifying production spend in India could enjoy a rebate of 30%, capped at 20 million rupees ($300,000) per film. The scheme would initially be endowed with $7.5 million and be administered through the National Film Development Corp., which until recently been focused mostly on grant schemes for local Indian movies.

Khare said that rebate cash would be paid within three months of proof of the qualifying production spend. And in order to allow films to draw down some cash early while they are shooting, a partial-refund scheme may also be introduced.

Khare said that the spillover or multiplier effect from stimulating film production — derived in terms of employment, taxation and image — make the incentive moves politically acceptable. He said that Modi understands the economic benefits and had demonstrated his commitment to the industry by personally inaugurating the National Museum of Indian Cinema in Mumbai, and by cutting the goods and services tax rate on film tickets from 28% to 18%.

India currently has 13 bilateral co-production treaties. But Khare said that treaties only work well when there is local finance to be had. He also said that he understood India to be in competition with other countries for film shoots. He named Morocco, Malta and Thailand as territories with competing location attraction schemes.

The likely incentive moves follow the official launch in November of the Film Facilitation Office and so-called “single-window clearance.” The FFO and the centralized permits system are both intended to simplify the formidably bureaucratic process of lining up all necessary paperwork in a vast country with 36 states or regional governments and dozens of languages as well as national bodies such as the National Monuments Authority.

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