The depreciation in the Indian currency is forcing the film industry to tighten budgets. Who will be hardest hit?
It’s hit us and it’s hit us hard. The free fall in the Indian rupee has the economy in a bind and the cascading effect has impacted everyone, barring none… the man on the street, businesses, traders and, of course, the film industry. Quite simply put, everything costs a whole lot more. This week, we spoke to filmmakers to assess the consequences of the deprecation in the rupee on the making of movies.
The falling rupee will have a huge impact on films which are in the pilepine or are in the middle of outdoor shoots. On average, it will raise the budget of a film by 20-25 per cent, if there’s an outdoor shoot involved. Filmmakers whose scripts demand overseas locations will be worst hit. For instance, my film It’s Entertainment, which is under production in Bangkok, has already taken a hit, thanks to the fall of our currency. The production budget has gone up by 15 per cent already. We hope the value of the rupee is soon brought under control, not just for the film industry’s benefit but for the economy at large.
The depreciation in the Indian rupee vis-à-vis the dollar is impacting the entire Indian economy, not just the film industry. As a result, fuel prices are likely to rise very soon. This, in turn, will impact our daily shooting schedules and our per-day shooting costs will shoot up. But filmmakers shooting on outdoor locations abroad are worst hit by the devaluation of our currency, which will automatically add to the topline. Recovery in such cases will become difficult. We fervently hope the situation improves.
The fall of the rupee against the dollar will impact the industry in terms of revenue earned. This is especially so in the case of filmmakers shooting overseas like my brother Anurag Kashyap, who is shooting his next abroad. We will have to pay a huge price when we hire technicians from abroad as we pay them in dollars. But the flipside is, overseas revenue will increase because now more and more international distributors and exhibitors will acquire Hindi film rights.
Sure, the industry will be badly affected and we need to buckle up to the challenge. I shoot most of my films overseas and will have to think twice before venturing to dream destinations because it will cost a bomb to shoot there. We will simply have to become more cost-effective. While filmmakers shooting overseas will risk a 40 per cent hike in their budgets, those shooting in India can expect a minimum 10 per cent hike.
It will definitely impact the industry, especially producers who are the ones investing in films. Even if I decide to shoot my forthcoming films in India, the impact of the depreciating Indian rupee will hurt business. We are already dealing with a hike in food prices. Soon, fuel prices are likely to rise. All these events will make filmmaking more costly.
The falling rupee has its disadvantages but it also has a few advantages. While production costs will rise, especially for those shooting overseas, the upside is the Western economy too is not in good shape. So, they are likely to offer filmmakers rebates and discounts. Also, the West is taking a keen interest in Indian films and locations in our country. With our currency falling, more foreign tourists and Western filmmakers will be attracted to shoot here, which will give our economy a fillip.
Not just the film industry but every industry is impacted by our falling currency. All rates will increase, and almost 30 per cent of shooting budgets are likely to soar. My upcoming film Welcome Back has a schedule in Dubai and Europe and my producers are gearing up for a 20 per cent hike in shooting budgets.
The depreciating rate of the rupee vis-à-vis the dollar will no doubt have an impact on our Hindi films but regional films will take a greater beating. Regional cinema, which is just finding its feet, had begun venturing overseas to shoot. Now, they will have to think long and hard before going West. The industry will have to plan their production budget more judiciously to curb unnecessary spending. Both Hindi and regional filmmakers will have to cut their production budgets to achieve better returns on investment.
I don’t think that the falling rate of rupees will impact the Indian exhibitors in any way. Ticket prices are not likely to get impacted because of this. May be some international exhibition chains that operate in the country might face the heat in their Indian properties but if you look at the larger picture, it won’t affect Indian cinema owners. But film producers will now refrain from shooting abroad because they will now have to stretch their budgets in order to do so.
With the falling in the value of the Indian currency, shooting abroad will definitely be expensive. So now Indian filmmakers will be compelled to shoot in India. But there’s a positive side to it too. Now when we will sell our films overseas, we will earn more money!