India Confirms Interest in Raising International Production Incentives

India looks to be moving closer to hiking its recently inaugurated cash rebates on international shoot spend in the country, including on animation and VXF works.

The confirmation came at last weeks Animation Film Festival, as India showed further signs of expansion in animation on various fronts: Heirloom, an Annecy Residency project from Indias Upamanyu Bhattacharyya, bowed at MIFA feature film pitches, the strongest in memory, and though it didnt take a prize, it was regarded as one of the sections standouts; Annecy-backed, AniMela, Indias first international festival for animation, VFX, XR, gaming and comics (AVGC-XR), revealed dates for its first edition in 2024.

Unveiled at last years Cannes Festival, Indian federal government incentives returs up to 30% of qualifying spend, up to a ceiling of INR20 million ($244,000). Productions employing 15% or more of their labor force from India can access a further 5% of spend, capped at INR5 million ($61,000).

That may well just be a point of departure,however. After my interactions here, you can say that an upward revision is being considered, Apurva Chandra, secretary, Ministry of Information and Broadcasting, Government of India, toldVarietyat a thronged Annecy MIFA market. He had travelled to Annecy in part to insist to foreign companies that the cash rebate takes in animation and VFX.

Playing in favour of a revision, rebates on international productions are very frequently raised upwards. Spains, for example, were introduced in 2015 and raised in 2016,2020 and 2023.

Rebate ceilings in France comes in at 30 million ($32.7 million). But, Chandra points out, labor costs in India are one quarter or one fifth of Europes.

India also has large ambitions for animation and its animation sector is growing, seen in the 75 Indian companies at Annecy, many regulars, and Chandras own presence at the worlds premier animation festival, where the Indian pavilion occupied prime MIFA real estate furthest towards the lake and next door to Banijay, the western worlds biggest independent.

Back office work, the actual animation, on many of the [worlds] biggest animation films is carried out in India, on titles from Hollywood, Europe and other parts of the world, Chandra said at Annecy.

Second, there are a number of Indian companies here who want to create their own IPs and we are here to market their IPs, he added ay Annecy, citing Heirloom.

Currently, the animation segment is valued at $462 million, the VFX industry at $608 million, according to the annual EY report on Indias industry. VFX sector turnover reaches $608 million.

These figure pale when compared to Indias IT sector, where India does the main back office work for almost all the companies in the world and is valued at $300 billion, Chandra argues. We feel AVGC has the potential to grow like that, he said at Annecy.

Part of Cannes Annecy Animation Showcase and set in 1960s Ahmedabad, Indias Manchester, on the cusp of technological revolution, Heirlooms centralcouple discover a magical tapestry immortalising their family past. From Bhattacharyya, one of Indias on-the-rise 2D animators, prized at Annecy in 2020 for Wade, Heirloom toggles 2D digital with a kind of needlepoint stop motion where every frame is a detailed tapestry,Varietyhas noted.

India has very young creators who are telling their own stories, we have a broad gamut of animators, Chandra toldVarietyat Annecy.

The inaugural AniMela will take place Jan. 18-21, 2024, in Mumbai. A platform for emerging Indian animation talent,AniMela will also feature a co-production market, pitching sessions, a residency, and knowledge sessions.

The governments objective is to generate employment, but also take India up the value chain in terms of being able to tell its own stories, and tell them really well and tell them to an international audience. And thats where we come in because we will connect our talent with the rest of the world, Kireet Khurana, director of AniMela organizer, the Aniverse and Visual Arts Foundation (AVAF).

Naman Ramachandran contributed to this article.