In a bid to capitalise on India’s huge capabilities in the entertainment sector and increase export revenues from this untapped service, Federation of Indian Chambers of Commerce and Industry (Ficci) has sought the extension of export benefits to the industry and tax breaks for venture capital funds, which are financing the needs of the sector.
Apart from seeking fiscal benefits including duty exemption on entertainment software, Ficci has written to the ministry of commerce and industry to look at the possibility of signing treaties with countries like Canada, Australia and the United Kingdom, which will enable non-resident Indians willing to fund Indian films and get tax breaks in their countries of residence.
Ficci has suggested extension of export benefits to the entertainment industry as well under section 80 HHC of the Income Tax Act, which will give the industry the status of a major export earner and exempt all export earnings.
In a detailed presentation to the ministry, Ficci has suggested that software should be allowed to be imported under the Open General Linecse (OGL) regime. The chamber has also recomemnded setting up of special zones with special facilities for broadcasting along the lines of software technology parks.
India has the potential to become a broadcasting and publishing hub for the region and in order to achieve it, all restrictions on uplinking should be removed, so that content could be produced in India and exported, Ficci has said.
Ficci is of the view that the entertainment industry has limited access to financial resources, especially through traditional methods of asset-backed financing, and thus the need for recourse to innovative means of financing such as venture capital.
Among other demands, the chamber has also sought duty exemption on entertainment software imports, lowering of customs and excise duty on products like CD ROMs, colour positives, jumbo rolls, colour negative films, cinematographic equipment and projectors.
Ficci feels that there is a need to project India as an entertainment superpower all over the world particularly considering the fact that Indian films, music and television programmes have enjoyed wide popularity across all continents.
The industry has a huge untapped export potential and could become the highest foreign exchange earner, provided it is developed properly. What is required is a well-coordinated and aggressive marketing of Indian entartainment software through all possible channels, including the worldwide web. At the same time, there should be systematic backward integration involving product and infrastructure development.