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Bollywood box office success is a boon for Indian economic activity

The film industry has far-reaching economic impact in Asia's third-biggest economy

Bollywood actor Salman Khan's five year jail sentence earier this month has sparked concerns about the investments made in his under production movies. He was later released from Jodhpur Central jail after an Indian court granted him bail. Sujit Jaiswal / AFP Photo
Bollywood actor Salman Khan's five year jail sentence earier this month has sparked concerns about the investments made in his under production movies. He was later released from Jodhpur Central jail after an Indian court granted him bail. Sujit Jaiswal / AFP Photo

Indian films have been breaking box office records this year, certainly a good omen for a host of sectors from advertising to tourism, considering the far-reaching economic impact of one of the world's biggest film industries, more commonly known as Bollywood around the globe.

“The contribution is huge,” says Tinku Singh, the group president and chief strategy officer at SRS Group, one of the largest cinema chains in north India. “There are a lot of industries that are getting impacted [positively with Bollywood's growth].”

Revenues for India's film industry, including box office collections, digital rights, and in-house cinema advertising, recorded a 27 per cent year-on-year growth in 2017 to 156 billion rupees (Dh8.78bn), according to a report by global consultancy EY, which estimates the revenues will climb to over 191bn rupees by 2020.

The year has been going well for the industry so far.

Padmaavat, an historic drama directed by Sanjay Leela Bhansali, starring Deepika Padukone and Ranveer Singh, one of the most expensive Bollywood films ever made, with a budget of 2.15bn rupees, took the box office by storm, raking in more than 5bn rupees globally since its release in January.

“There's a huge fan following for the big Indian stars, and whenever their film hits the screen, people go mad about it,” says Mr Singh. “Especially, for Amitabh Bachchan, Salman Khan, Aamir Khan, Indians go crazy. What I feel is that in India people would be happy to give up their food for one day, but they won't give up entertainment.”

When Salman Khan was given a five-year jail sentence this month in a case of poaching an endangered blackbuck, Bollywood producers went into a frenzy over the economic impact the judgment could have, given the fact that a huge amount of funds had already been invested into Mr Khan's under production films such as Race 3. Two days later, he was released on bail, to the relief of the industry.

Given his popularity, Salman Khan commands 600 million rupees per movie, while Deepika Padukone, one of the industry's biggest female stars, was reportedly paid 110m rupees for Padmaavat, according to figures cited by the Times of India newspaper.

These hefty fees are eating into the profitability of some of the big star films, but overall a greater number of Bollywood movies are enjoying healthy profits, data reveals.

Of the 50 top Hindi films released last year, 14 of the them managed to record a positive return of more than 100 per cent, compared to 8 in 2016, according to EY.


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Nushrat Bharucha from Mumbai has had several leading roles in Indian films, including Pyaar Ka Punchnama. But she explains that it is becoming even more challenging to make it in the industry, and she had to face a lot of rejections along the way.

“I think over time Bollywood has become a little more difficult to make a mark in,” says Ms Bharucha, who graduated in advertising and worked her way up through working in adverts and small roles in films to get to Bollywood.

Luck, she says, has played an important role.

“There are a lot of actors that are very good at their jobs but you don't see them, and don't know whether they're going to get the right break and the recognition. There are so many people wanting to become actors, wanting to get in the glamour world.”

The pressures are enormous even before one gets to step into the industry.

“You need to be a very good dancer, you need to be a very good fashionista,” says Ms Bharucha.

People like her invest a lot of time, energy and money into developing those skills, which is a boost for associated sectors, especially, fashion retail.

Thousands upon thousands, descend on Mumbai, the home of Bollywood, with a dream of becoming the next mega super stars like Shah Rukh Khan or Kareena Kapoor. Most of them don't get anywhere but they do contribute to growth of local businesses, with many taking cheaper accommodation and forking out substantial fees for honing their acting skills.

There is big money for those making it in Bollywood. But one doesn't necessarily have to be involved directly in the film industry to reap the benefits.

Shooting movies has a huge impact on the locations in which they are filmed, as crews descend on a location, bringing a hefty stream of revenues for businesses in the area. Filming directly generates revenues for a destination through spend on accommodation, transportation, equipment, local labour, and fees and taxes.

Majid Majidi, an Oscar-nominated Iranian director, shot his 2017 drama film Beyond The Clouds in Mumbai.

“It was a difficult experience as well,” says Mr Majidi. “Working outdoors in such a crowded city like Mumbai, it was very difficult to work here."

To ease his troubles, Mr Majidi opted to hire all of his crew locally.

The travel and tourism sector often moves to capitalise on the appeal of Bollywood, given the huge influence it can have over holiday choices of Indians.

“Bollywood has always influenced Indian society in multiple ways in terms of lifestyle, fashion as well as travel,” says Karan Anand, the head of relationships at Cox & Kings, one of India's oldest travel companies. “Bollywood fans always dream of visiting beautiful locations shown in the movies which is why a movie can help to boost tourism at a particular destination.”

He explains that last year when the movie Jab Harry Met Sejal, starring Shah Rukh Khan and Anushka Sharma was released, there was a sudden surge in interest from customers in destinations including Prague, Lisbon, Budapest and Amsterdam, where the movie was shot.

“Cox & Kings introduced a special romantic trail based on the film, which included guided city tours of all these destinations,” says Mr Anand.

In India, the travel firm also introduced special packages to Manali, Ladakh, Shimla, and Amritsar where the Salman Khan movie Tubelight was shot.

That had a positive knock-on impact on a range of businesses from hotels and restaurants to local handicraft industries, all thanks to Bollywood opening new avenues for business.

“Arunachal Pradesh, which is otherwise an off-beat destination in India, suddenly came to limelight after the movie Rangoon was released,” says Mr Anand.

There are a number of ancillary industries reaping the Bollywood benefits.

Ami Patel is a celebrity stylist from Mumbai. She got her break seven years ago when she worked as an fashion director on a magazine, and spotted the actress Priyanka Chopra in an Accessorize store in London trying on a hat. The two got chatting and the actress offered Ms Patel the opportunity to style her.

“If an opportunity knocks, the idea is you take it,” she says.

Things took off after that and Ms Patel left her job at the magazine to style actresses including Ali Bhatt and Katrina Kaif.

Ms Patel now earns much more than she would get from working for a magazine, typically earning between 20,000 rupees to 40,000 rupees for each event.

She explains that Bollywood has had a major impact on the fashion industry.

“For a designer, having their clothes on a film star is the biggest free branding exercise they can get,” she says. “A Bollywood star's reach is the widest and people do rush out and buy those outfits.”

With revenues only set to grow over the years, Bollywood will keep on delivering glittering returns and roles for individuals and businesses in India.

Updated: April 14, 2018 04:06 PM


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