Yes, you read that correctly, India now offers up to 40% cash rebate on your India production budget! Thinking of bringing your next film, TV series, or documentary project to India? Discover how India's recently updated production incentives can make your project more cost-effective.

Governments around the world recognize film and TV production as a key economic sector. At the time of writing, there are 120 such incentives globally. India now offers a highly competitive proposition with a potential rebate of 40% on your qualifying production expenditure.

How to Apply for India's Production Incentives

Here’s a simplified overview of the process. If you like what you read, we recommend you download the full official guide here, or contact us, before embarking on your financial planning.

India's film production incentives are administered by the India Cine Hub (ICH) via their website indiacinehub.gov.in

Foreign production companies applying for the incentive must apply via an eligible Indian entity, such as an Indian Line Producer, Production Services Company, or an Indian Co-producer for official co-productions.

For Foreign Productions (Live Shoots):

1. Obtain Filming Permission: Before applying for incentives, secure the necessary filming permission from the Ministry of Information and Broadcasting (MoI&B) for feature films/series or the Ministry of External Affairs (MEA) for documentaries. Expenses count from the date permission is granted.
2. Apply for Interim Approval: Submit an application for Interim Approval to the ICH before the start of principal production in India. This application includes details like the production company, project information, schedule, budget estimate, and a copy of the agreement between the international producer and the Indian service company. The Interim Approval Certificate is typically valid for 12 months, or 24 months for projects with Qualifying Production Expenditure of INR 200 million (approx $2.25M) or more.
3. Undertake Production: Film the project in India, incurring Qualifying Production Expenditure (QPE). The minimum QPE is Rs 30 million (approx $338k) for feature films/series, but there is no minimum QPE for documentaries. Feature Films must be at least 72 minutes in duration and documentaries at least 30 minutes.
4. Apply for Final Approval and Disbursal: Within 90 days of finishing production in India, submit the final application to the ICH. This requires documentation including the interim approval, an audited expense statement verified by an ICH-appointed auditor, invoices, bank statements, and various declarations (e.g., origin of funds, related party transactions).
5. Disbursement:
   • Standard: 90% of the approved eligible incentives are disbursed upon final approval. The remaining 10% is disbursed upon submission of the final film with the required "Filmed in India" credit line and ICH logo, and an affidavit confirming public release.
   • For Documentaries or NOC-required projects: 20% is disbursed on grant of approval, 70% upon receiving the No Objection Certificate (NOC) from the relevant government representative/Indian Mission, and the final 10% upon submission of the final film with credits and affidavit regarding release.

For Pure Animation, Post-Production, and Visual Effects (VFX) Services:

1. Apply for Interim Approval: Apply for Interim Approval to the ICH within one month of signing the contract between the Indian service company and the foreign company. No prior filming permission from MoI&B is required for these projects. Expenses count from the date of submission of the interim approval form.
2. Undertake Services: Perform the animation, post-production, or VFX services in India, incurring QPE. The minimum QPE is Rs 10 million (approx $113k). For QPE calculation, 75% of the Service Contract value is considered the basic QPE.
3. Apply for Final Disbursal: Within 90 days of project completion in India, submit the final application. Required documents include the interim approval, audited expense statement (if applicable), copy of invoice and Foreign Inward Remittance Certificate (FIRC) from an Indian bank, and various declarations.
4. Disbursement: 90% of the eligible incentives are disbursed upon final approval. The remaining 10% is disbursed upon submission of proof of incorporating the "Created in India" credit line and ICH logo, and an affidavit regarding public release.

For Official Audio-Visual Co-productions:

1. Obtain Co-production Status: Projects must be granted official co-production status under one of India's bilateral treaties. Apply for this status with the ICH (via MoI&B). For documentaries, prior MEA filming permission is also needed before applying for co-production status. Expenses accumulate from the date permission is granted (live shoot) or co-production status granted (pure animation).
2. Apply for Interim Approval: Apply to the ICH within 4 weeks of receiving co-production status.
3. Undertake Production: Incur Qualifying Co-Production Expenditure (QCE) in India. There is no minimum QCE requirement for official co-productions.
4. Optional 1st Disbursal: The Indian co-producer can choose to apply for a first disbursal of up to 50% of the eligible incentive after 50% of the approved QCE has been incurred.
5. Apply for Final Disbursal: Submit the final claim within 90 days of project completion. This includes audited expense statements, declarations, and potentially an NOC for documentaries or flagged projects.
6. Disbursement: Follows stages like foreign films/services, potentially with the 1st disbursal factored in. An NOC is mandatory for documentaries and flagged projects.

Incentive Structure & Value:

• The incentive is a reimbursement (cash rebate) based on QPE, not a tax credit directly linked to tax liabilities.
• The base incentive rate is up to 30% of QPE incurred in India.
• Bonus Incentives:
  • 5% bonus for employing at least 15% Indian labour (above or below-the-line) (available only for live shoots). Pure animation/post-production/VFX projects are not eligible for this labour bonus.
  • 5% additional bonus for Significant Indian Content (SIC), assessed based on criteria like Indian lead characters, Indian Head of Department, portraying India positively, or promoting tourism.
• The maximum incentive payout is Rs 300 million (approx $3.4M) per project across all schemes. This is a significant enhancement from the earlier limit.
• Total available annual budget for incentives is Rs 1.5 billion (approx $17M) for financial years 2023-24 and 2024-25, disbursed on a first-come, first-served basis within the financial year (April to March).
• Incentive applications for foreign films or services must be made by an Indian Line Producer/LPSC or PPA. For co-productions, the Indian Co-producer applies. A legally binding agreement between the international and Indian entities regarding the incentive process is required.

Key Administrative Controls & Integrity Measures:

• QPE inclusions vary slightly between live shoots and pure services but broadly cover costs incurred in India for pre-production, production, post-production, VFX, and animation, including crew wages (for Indian residents), cast, studio rental, equipment, and vendor costs. Non-eligible expenses typically include items like entertainment, publicity, capital expenditure, and expenses outside India.
• Expenditure claims are subject to audited expense statements by an auditor appointed by the ICH.
• Applicants must provide declarations regarding the origin of funds and related party transactions, certifying they were at arm's length.
• The ICH has the right to inspect and audit books of account and records.
• Non-compliance, financial irregularities, forgery, misrepresentation, failure to film as permitted, or negative environmental impact can lead to the cancellation, rejection, withholding, or revocation of incentives and potential blacklisting of the applicant.
• Productions must comply with all applicable Indian laws, including tax and labour laws.

FAQs

Here are answers to some frequently asked questions about India's production incentives:

• What types of projects are eligible? India offers incentives for foreign feature films (min. 72 mins), commercial TV/Web series, documentaries (min. 30 mins) involving live shoots in India, pure animation/post-production/VFX services undertaken by an Indian company for an international production, and official audio-visual co-productions under India's bilateral treaties.
• Are documentaries eligible? Yes, documentaries of at least 30 minutes are eligible, provided they receive filming permission from the MEA (or are official co-productions).
• Are pure animation, post-production, and VFX projects eligible? Yes, provided services are undertaken in India by an Indian company for a foreign entity. These projects do not require prior MoI&B filming permission.
• Are reality TV shows eligible? No, currently reality TV shows do not qualify for the incentives.
• What is the maximum incentive amount? The maximum payout per project is Rupees 300 million (approx $3.4M).
• How is the incentive calculated? It's a reimbursement of up to 40% of Qualifying Production Expenditure (QPE) incurred in India, comprising a base rate (up to 30%) and potential bonus incentives (5% for Indian labour - live shoots only, 5% for Significant Indian Content).
• What is the minimum QPE required? For foreign film live shoots (features/series), it's Rs 30 million (approx $338k). For pure animation/post-production/VFX services, it's Rs 10 million (approx $113k). There is no minimum QPE for official co-productions or documentaries.
• Who applies for the incentive? An eligible Indian entity applies on behalf of the international producer. This is typically the Indian Line Producer/Production Services Company (LPSC) or Post Production Agency (PPA) for foreign films/services, or the Indian Co-producer for official co-productions.
• When can expenses be counted towards QPE? For foreign film live shoots, from the date filming permission is granted by MoI&B or MEA. For pure animation/post-production/VFX services, from the date of submission of the Interim Approval form to the ICH. For official co-productions, from the date filming approval is granted (live shoots) or co-production status is granted (pure animation).
• Do I need Interim Approval? Yes, applying for and obtaining Interim Approval before starting the project/shoot in India is a mandatory eligibility requirement.
• How long after completion do I have to apply for final disbursal? Within 90 days of project completion in India.
• Can I apply separately for live shoot and post-production incentives for the same project? No, a single project can only apply for incentives once, covering all eligible costs incurred in India. If a project includes both live shoot and post-production in India, the application is typically made under the live shoot guidelines.
• What about state-level incentives? Various Indian states also offer regional filming incentives which can be combined with the ICH incentives.

Conclusion

India is actively positioning itself as a competitive global destination for foreign productions. The latest incentives demonstrate a clear strategic intent to attract international film and television production. By offering a substantial financial return on qualifying expenditure incurred in India, supported by a dedicated and streamlined administrative body, India provides a compelling financial proposition for producers.

Beyond the financial benefits, filming in India offers unique opportunities, from diverse locations to a large skilled workforce.

For producers considering India, understanding these incentives is crucial for budgeting and planning. Partnering with an experienced Indian production services company is the key to navigating the process smoothly, ensuring compliance with eligibility requirements, maximising eligible QPE, and successfully claiming the incentive.

Ready to explore the possibilities and potential savings for your next project in India? Contact us today to discuss your production and how we can help you leverage India's film incentives.