Media and Entertainment Sector Outlook Post Policy Amendments

The Union Budget 2025 has brought many policies into place to improve the Media and Entertainment (M&E) industry of India and make it more prosperous. The financial plan which will boost the Media and Entertainment (M&E) sector.

Tax Incentives and Digital Transformation

The 2024 Budget continues to extend tax exemptions to data centers as they help ensure digital infrastructure. This is believed to boost competing foreign investments and create jobs while also improving India's competitiveness worldwide.

Support for Content Creation and Innovation

Reduced taxation and incentives for producers will foster the production of cultural and historical content. Besides, investments in VFX, AI, and green production techniques will further advance India's positioning as a leader in world entertainment.

Focus on Digital Growth and AI Integration

The budget highlights the importance of digital growth and AI-driven innovation in the M&E sector. By promoting digital transformation, the government aims to provide growth opportunities for media, entertainment, and advertising industries.

Enhancing Consumer Demand

Proposals for tax cuts for the middle class are expected to put more money in people's hands and raise demand for many of the M&E businesses. This sort of stimulus would create opportunities for sectors such as cinema, music, and gaming. These measures are intended to create an ecosystem that is vibrant and competitive in the M&E sector in India, using technology and economic measures to stimulate growth and innovation.

Responses-Union Budget FY26

Following Finance Minister Nirmala Sitharaman's presentation of the Union Budget in the Lok Sabha on February 1, 2025, responses have been streaming in from the industry leaders and business thinkers. 

Sachin Shah, Partner, EY

“The Indian Media & Entertainment (M&E) sector continues to emerge as a powerhouse of cultural and economic significance, with the government playing a pivotal role in steering its trajectory towards an ambitious vision for the future. As we approach 2025-26, the industry stands at the cusp of a transformative era, fuelled by digitalization, changing content consumption patterns, and supportive government policies. With an impressive CAGR of 8.3%, the M&E sector is poised to expand its global footprint, leveraging cutting-edge technologies and creative storytelling to captivate audiences both domestically and internationally. Consumption in India has been under stress in the last few quarters as consumers tightened their purse strings amid stubborn inflation and modest wage growth. In the budget proposals announced on 1 February 2025, the proposed tax cuts will largely benefit the middle class and increase their disposable income, further fuelling demand across essential and aspirational categories. This is going to be a helpful factor in accelerating the demand for various M&E businesses.”              

Pradeep Dwivedi, Group CEO, Eros Media World

 “An overall positive budget with middle-class beneficial schemes and rationalized income-tax structures that encourage the consumers of media business at large. Sector-agnostic schemes for startup-up funding and an outlay of Rs 500 crore for setting up AI Centers of Excellence are very promising initiatives that will help the creative and IP-based industries.”             

Ashish Sehgal, Chief Growth Officer, Zee Entertainment Enterprises Ltd

 “Apart from the tax rebate up to Rs 12 lakh of income, which will boost consumption sectors like FMCG, auto, consumer durables, and real estate, there is also good news for MSMEs, as the Union Budget doubled credit guarantee cover for them to  Rs 10 crore. This will help them invest more. Hence, all the above sectors will help increase AdEx by spending more on advertisements to further boost consumption through the mind matrix.”    

Vishesh Sharma, Former CMO of Bajaj Broking

 “Extra disposable income is going to increase the purchasing power of consumers, and this will, in turn, drive demand across multiple industries, including advertising. The impact of these measures is also expected to extend to cinema advertising.”

Mautik Tolia, Managing Director, Bodhitree Multimedia Limited

“We hope there is an increase in the allocation of funds corpus towards the international production subsidies being given by the Indian government. This has huge potential to attract more international movie and show production to India. Prasar Bharati’s WAVES is a stronger push for the OTT sector, as government-led initiatives focused on regional content, could create significant opportunities for emerging content creators across India while also stimulating regional economies. Additionally, reducing entertainment tax on film exhibitions would help drive higher footfalls in cinemas, attracting larger audiences and revitalizing the theatrical experience.”

Russhabh R Thakkar, Founder and CEO, Frodoh

“The budget must directly incentivize advertising-driven growth by reducing GST on digital ad spends and offering structured tax relief for brands scaling their marketing investments. A targeted media credit program where verified businesses get government-backed ad grants could significantly boost digital adoption, especially in Tier 2 and 3 markets.”

Siddharth Kumar Tewary, Founder and Chief Creative, Swastik Productions

“India’s media and entertainment industry is more than an economic sector—it’s a reflection of our soul. Budget 2025 must prioritize creators by reducing taxes, incentivizing cultural and historical content, and enabling deeper digital connectivity to take Indian stories to every home, urban and rural. Simplifying regulations and investing in cutting-edge technologies like VFX, AI, and sustainable production can position India as a global entertainment leader. This isn’t just about business—it’s about giving our stories the power to inspire, connect, and transform on a global scale.”

Siddharth Dhabade, Chief Business Officer, Lemma Technologies

“Consumption has declined, and a key way to address this would be through income tax reductions. Lowering income tax would increase disposable income, allowing people to spend more, which in turn would boost demand. The primary issue is the economic slowdown, and putting more money in people’s hands through tax relief could help stimulate consumer spending and drive overall demand.”

Vinit Karnik, MD, GroupM

“We hope for some relief for taxpayers like us, particularly the salaried class, who shoulder a significant tax burden. However, are there any signs of such relief? Unfortunately, it seems unlikely.”

Lara Balsara Vajifdar, Executive Director, Madison World

“I would hope that the budget has adequate measures to boost consumption in the economy by increasing the disposable income of citizens. Boosting consumption is the need of the hour for most businesses.”

Conclusion

The Union Budget 2025 introduces measures to boost India's Media and Entertainment sector, including tax incentives and digital transformation support. Industry leaders are optimistic about its potential to drive content creation, innovation, and consumption. The focus on AI and technology is set to position India as a global entertainment hub.