about the benefits of the recently concluded Indo-UK film treaty. What does the Indo-UK film treaty entail?
It enables production companies from UK and India to get certain benefits provided their work is approved by UK's film commission, or the information and broadcasting ministry here. Producers get tax benefits in UK while in India the benefits will be softer non-financial elements.
I believe the treaty still has to iron out a lot of taxation issues.
There are taxation issues with India. The UK has a fairly well developed tax regime, spelling out what can be exempt and what income can be taxed. We have not yet made those rules.
India could consider a co-production as a separate taxable entity but a separate entity is the highest taxed entity as far as Indian companies go, so, instead of being beneficial, it could be detrimental.
What is being done to resolve this issue?
UK's film council is in dialogue with the information and broadcasting ministry here. They might need to go to the ministry of finance.
Apart from the film treaty which has just been signed with UK, does India have similar treaties with any other country?
India has a similar treaty with Italy. Currently, a dialogue is ongoing between Canada and India too. Once it catches on in one region, I'm sure similar relationships will develop in other countries as well.
Could you throw light on how these treaties will benefit Indian producers?
The ease of financing in UK will be made available to Indian producers. In UK, tax finances the films, and Indian producers will become eligible to draw down on those taxes. The Indian entity also will get the benefit of cheaper funds.
What would the nature of these co-produced films be?
The films must have cultural benefits for both UK and India. There are 32 criteria being listed and the film must satisfy 16 of these. The film could be in Hindi or English. It could also mean a crossover film or a film in dual languages.
What will be the relative impact of the treaty on film producers in both countries?
It is far more advantageous for UK producers as they have access to a specific fund which the UK government makes available to them. I suspect that Indian producers will ultimately set up a UK production company and produce their films out of that entity and also have an Indian leg.
Won't that have a negative impact on India, as more films will be produced out of UK?
No, it won't, as there will have to be an element of local production. The film has to have content of both countries to qualify as an Indo-UK production. The cost is cheaper in India, but the tax benefit is in UK. So, they would have to blend the cost of India and the tax of UK.
But, the sense that I get is that Indian producers do not have much to gain?
Indian producers will get international exposure and an entry into the UK market. This will help crossover films and will truly play a role in conveying the Indian culture to the world.
