Indian film stocks plummet following Trump's tariff on foreign movies
What's the story
Shares of media and entertainment companies fell significantly on Tuesday after US President Donald Trump announced a 100% tariff on movies made outside the United States. The move is likely to have a major impact on the Indian film industry, which exports films in multiple languages to America. These films are extremely popular among the Indian diaspora living in the country. The Nifty Media index fell over 1%, with seven of its 10 constituents trading in the red.
Tariff details
Trump said US movie-making business stolen by other countries
In a post on Truth Social, Trump said, "Our movie-making business has been stolen from the United States of America, by other Countries, just like stealing 'candy from a baby.'" He added that he would be imposing a 100% tariff on any and all movies made outside the US. Prime Focus emerged as the top loser, sliding 5% to hit lower circuit at ₹175.94. PVR INOX fell up to 3% to ₹1,072.10, while Mukta Arts dropped nearly 2% to ₹68.
Market impact
US is a major market for Indian films
The US is one of the biggest markets for Indian films due to its large Indian diaspora. India produces movies in several languages, which are popular among this diverse audience. According to a 2017 Forbes report, Indian language films have become big business across the US and Canada with earnings commonly exceeding $8 million and occasionally topping $10 million.
Enforcement challenges
Concerns over enforcement of tariffs
Analysts have raised concerns over how these tariffs would be enforced, considering that movies and TV shows are also distributed digitally. There are also questions about how this move would affect US films shot in foreign locations. The announcement comes just after the Trump administration imposed new tariffs on branded pharmaceutical products not made in the US.