Key Recommendations for the Indian Media and Entertainment Sector in the Union Budget
The Indian media and entertainment (M&E) sector is on a rapid growth trajectory, with digital media and online gaming leading the way. Prashant Bhojwani, Partner, Corporate Tax, Tax & Regulatory Services at BDO India, highlighted that the sector is expected to reach USD 28 billion by 2023, thanks to the opportunities brought about by digitisation.
With the Union Budget looming, all eyes are on whether the proposals will support the continued expansion of the M&E sector. One key area of focus is Foreign Direct Investment (FDI) in print media, which currently has a cap of 26%. Bhojwani suggests that increasing the FDI cap to 49% under the automatic route could attract much-needed foreign investments and support the modernisation of the print sector.
Another important aspect is the need for a tax holiday for new theatres to encourage investments in the exhibition business and boost screen density in India. Despite being the largest producer of films globally, India lags behind in screen density compared to countries like China. A tax holiday could incentivize investments in new screens and stimulate economic activities associated with the film industry.
Furthermore, Bhojwani emphasized the importance of granting infrastructure status to the broadcasting sector, which is capital-intensive and requires substantial investments in technology and content development. This status could help secure financing for growth initiatives and provide other advantages to the sector.
Lastly, the booming online gaming sector in India also requires attention from policymakers. Bhojwani suggested that the Government should formulate a comprehensive policy to introduce international best practices, distinguish between real-money games and other online games, and foster technological innovation in the sector.
Overall, the M&E sector in India is poised for significant growth, but it will require supportive policies and investments to reach its full potential. The upcoming Union Budget will be crucial in determining the future trajectory of this dynamic industry.