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LONDON -- Britain's film industry is increasingly looking to swap Hollywood for Bollywood, as it tries to diversify investment away from the U.S., with Indian filmmakers also hoping to tap the U.K.'s large diaspora.
Yash Raj Films, one of India's largest production companies, is planning to make three films in the U.K. next year after a long hiatus. Its last film in the U.K. was "Fan," an action thriller made with a budget of around 10 million pounds ($13.3 million) in April 2016.
The production company was part of a film industry delegation led by Prime Minister Keir Starmer to visit Mumbai in October to forge closer ties, shortly after both countries signed a long-awaited trade deal. The British Film Institute has also agreed to a memorandum of understanding with its Indian equivalent, the National Film Development Corp.
Rajinder Dudrah, professor of cultural studies and the creative industries at Birmingham City University, said Starmer's trip to India with a "huge entourage" from the creative sector was a sign he was taking the industry seriously.
The U.K. film industry has become a global production hub over the past 15 years thanks to generous tax incentives. BFI figures show that total production spend in the U.K. on film and high-end TV surged from 849.2 million pounds in 2007 when a film tax relief was introduced, to a record of 5.4 billion pounds in 2022.
The tax relief came in the form of a 25% cash rebate on films that have been certified as British-made by the BFI, meaning the production companies must be incorporated in the country, and at least 10% of its "core costs" must relate to activities in the U.K. All films are eligible for the rebate.
"Strong and reliable tax rebates for shoots act as incentives for Indian productions to select the U.K. if there's a requirement for shooting in foreign locations," said Akshada Bhalerao, head of business at U.K.-India media company Civic Studios.
Such tax relief helps not only big production companies like Yash Raj Films, but also small independent filmmakers. Santosh and Sister Midnight, two Civic Studios productions in Hindi and largely filmed in India, received support through the tax relief alongside production grants from the BFI.
Bhalerao also said the U.K.'s large diaspora population makes it "one of the key markets for Indian producers from a distribution perspective." For example, she said the marketing campaign for Santosh was "specifically designed to appeal to the diaspora audience."
"Audiences today are responding to cross-cultural content and are not bound by the traditional rules of language or geographies," she added.
It also makes sense for Britain's film industry to diversify from U.S. investment. Last year, 65% of non-U.K. production spending came from the five major U.S. film studios -- Universal Pictures, Paramount Pictures, Warner Bros., Walt Disney Studios and Sony Pictures -- alongside Netflix, Apple and Amazon, the BFI said.
This reliance on the U.S. was laid bare during the Hollywood scriptwriters' strike in 2023, when inward investment fell by a third, BFI figures show, although it rebounded the next year. The danger has been further highlighted after U.S. President Donald Trump threatened to impose 100% tariffs on foreign-made films.
"We have seen with the impact of the strikes from actors and writers across the Atlantic, that when the U.S. sector sneezes, it's all too easy for the U.K. film industry to catch a cold, so attracting new streams of investment is important for the future," Caroline Dinenage, chair of the Culture, Media and Sport Select Committee, told Nikkei Asia.
India was the second-largest source of inward investment into U.K. film, making up 7% of the total spending over the last decade, and contributing 118 million pounds a year to the domestic economy, which BFI hopes will increase after the memorandum of understanding with National Film Development Corp.
Many U.K. film studios are targeting growth from the Indian film industry. Representatives from Pinewood Studios and Elstree Studios, two of the largest in the U.K., accompanied the prime minister on his visit to India.
Smaller studios are also looking to attract Indian filmmakers. Rachel Morrison, studio director at Farnborough International Studios, said she was seeing more interest from international filmmakers.
"Bollywood and Nollywood (the Nigerian film industry) are essential pillars of the global creative ecosystem and represent significant opportunities for U.K. studios," she said.
Raheel Malik, manager at West London Film Studio, said the Indian film industry was becoming "increasingly relevant" as studios "look to diversify beyond the traditional U.S.-centric pipeline."
"Its scale, output and rapid growth make it a market the U.K. can't ignore," he added.
Chris Dorrell is a contributing writer.
