- India Co-Production Agreement
Overview
2.1The proposed treaty action is the entry into force of the Audiovisual Co-production Agreement between the Government of Australia and the Government of the Republic of India (Mumbai, 10 March 2023) (Agreement) through exchange of notes. The Agreement was referred to the Joint Standing Committee on Treaties (JSCOT) on 21 June 2023. The Department of Infrastructure, Transport, Regional Development, Communications and the Arts (DITRDCA) is the lead Department.
2.2The Agreement provides a framework for the parties to cooperate to approve the making of audiovisual productions. These include feature films, television, video recordings, animations, and digital format productions. Projects that are approved as official co-productions under the Agreement will be regarded as national productions of both Australia and India.
2.3This would be the fourteenth co-production arrangement that Australia has entered under Australia’s International Co-Production Program. The aim of this program is to foster industry development and cultural exchange between cooperating countries.
Justifications for the treaty
2.4The National Interest Analysis (NIA) provides the following as justifications for the Agreement:
- build on existing partnerships between Australia and Indian producers to develop high quality projects
- encourage screen industry employment, technical development and cultural exchange between Australia and India by facilitating screen co-production
- increase output of high-quality productions through sharing investment with India
- open new markets for Australian film, television, animation and digital format productions in India and internationally
- share the risk and cost of screen production
- establish links with Indian production and distribution interests
- facilitate interchange between Australian and Indian screen professionals, particularly those in principal creative positions
- create employment opportunities for Australian industry personnel
- showcase Australian culture, landscapes and people to India and help boost tourism
- strengthen existing diplomatic ties between Australia and India
- financial benefits including eligibility for co-productions to access funding
- India is an attractive market for Australian co-productions due to the potential to reach a very large audience
- India is currently the largest producer of films globally, with one of the largest cinema admissions markets in the world.
- On the value of the treaty, the Australia India Film Council (AIFC) submitted that the Agreement is ‘an excellent instrument to formalise a tangible means to encourage greater collaboration between the Australian and Indian film industries.’ Films & Casting Temple (Temple) submitted that ‘the treaty embodies a belief that co-production between the two nations will enable greater understanding between the Australian population and their India diaspora neighbours.’
- In alignment with these views, An Australian Film Initiative (AAFI) submitted that, ‘this treaty will bring two of the world’s best production talent pools together in an encouraging and creative way.’ The Australian Centre for Indian Cinema (ACIC) submitted that the Agreement is ‘an opportunity to meld together our two cultures through the effective and attractive medium of cinema and screens.’ Screen Producers Australia (SPA) submitted that: ‘Co-productions – both official and non-official – are important pathways to markets and international audiences and are of great value to independent productions.’
- However, SPA did note that it ‘is concerned that currently, a number of initiatives for the screen industry such as the Audio-visual agreement with India are undertaken on a seemingly ad hoc basis, and not as part of an overall export growth strategy for the screen sector by the Australian Government.’
Government commentary
2.8Prime Minister Anthony Albanese said in March 2023 in New Delhi, India, on his meeting with Indian Prime Minister Narendra Modi:
In recognition of a unique part of our bilateral economic relationship, we also discussed the potential presented by the India-Australia Audio Visual Co-Production Agreement that has been exchanged here today. This agreement will support skilled jobs, creative exchange and the development of screen projects of cultural significance in both countries.
2.9Further, the Government, through Senator the Hon Don Farrell (Minister for Trade and Tourism; Special Minister of State) and the Hon Tony Burke MP (Minister for Employment and Workplace Relations, Minister for the Arts) communicated that this agreement was “landmark”. Mr Burke said:
As a long-time Bollywood fan, I’m particularly excited for this agreement. India is a global powerhouse when it comes to film… Bringing a slice of Bollywood to Brisbane, while showcasing Melbourne to Mumbai is good news for the Australian screen industry… This will open up new audiences and investment for local screen producers, taking Australian stories to one of the largest cinema audiences in the world.
2.10SPA submitted that ‘the Australian Government should seize the complementary opportunity to grow Australia’s screen exports, expand co-production arrangements and take greater advantage of co-production opportunities to reach more international markets for Australian screen output.’
Background
Relationship between Australia and India
2.11According to the Department of Foreign Affairs and Trade (DFAT), India is the world’s largest democracy and the fifth-largest economy. Australia’s relationship with India is its oldest continuous diplomatic relationship with any Asian country, establishing diplomatic relations in 1943. Australia’s relationship with India was upgraded to a Comprehensive Strategic Partnership (CSP) in June 2020.
2.12Through the CSP, both countries are committed to working together on science and technology, maritime cooperation, trade and investment, defence ties, agriculture, education, and tourism. Australia and India hold annual leader-level summits, with Australia being one of only three countries India meets in this way. The Prime Ministers of Australia and India also interact at major international meetings, including the Quad, G20 and East Asia Summit.
2.13Australia and India also have a strong economic relationship. In 2022 India was Australia’s sixth-largest two-way goods and services trading partner and fourth-largest goods and services export market. Australia’s two-way goods and services trade with India was $48.4 billion in 2022. That same year Australia’s exports to India were $34.8 billion and imports from India were $13.5 billion.
2.14Australia and India are currently negotiating the bilateral Comprehensive Economic Cooperation Agreement (CECA) and progressing cooperation in a range of areas including critical minerals, health critical technology, science, and agriculture.
2.15India became the world’s most populous country in 2023. There are strong people-to-people links between Australia and India. The Indian community in Australia is Australia’s second largest and fastest-growing overseas-born group. In the 2021 Census, 976,000 people reported Indian heritage.
Co-production agreements
2.16Co-production agreements are between Governments and specify how projects can be ‘co-produced’ between partner countries. The agreements are in the form of either a treaty or a Memorandum of Understanding (MOU). Projects that are made under a co-production Agreement between two countries are treated as a national project of those two countries which means that the benefits attached to being a ‘national film’ can be accessed. Official co-productions can only be made where there are arrangements in place between the countries.
2.17As noted, the Agreement in question will be Australia’s fourteenth co-production agreement. Australia currently has co-production treaties with eleven countries: Canada, China, Germany, Ireland, Israel, Italy, Korea, Malaysia, Singapore, South Africa, and the United Kingdom (UK). Further Australia is a signatory to MOUs with France and New Zealand. Australia is currently negotiating a co-production treaty with Denmark and is renegotiating its treaty with the UK. There is no agreement with the United States.
2.18India, for its part, currently has co-production agreements with fifteen other countries: Bangladesh, Brazil, Canada, China, France, Germany, Israel, Italy, Korea, New Zealand, Poland, Portugal, Russia, Spain and the UK.
2.19Canada is Australia’s most active co-production partner, followed by the United Kingdom and France. The Australia/Canada co-production treaty was signed in 1990 (entry into force 1990) with 72 co-productions and a total budget of $625 million. Australia’s co-production treaty with the UK was signed in 1990 (entered into force 1990) with 51 co-productions and a total budget of co-productions being $563 million. Further, Australia’s co-production relationship with France, was signed in 1986 (entry into force 1986) with 35 co-productions and a total budget of $298 million.
2.20Countries in the Asia Pacific region have more recent co-production agreements with Australia and comparatively fewer productions such as: a co-production treaty with China, which was signed in 2007 (entry into force 2008) with seven co-productions and a total budget of $176 million – this treaty is for features only; a treaty with Korea which was signed in 2014 (entry into force 2014) with no co-productions; a treaty with Malaysia, which was signed in 2019 (entry into force 2021) with no noted co-productions by Screen Australia and a treaty with Singapore, which was signed in 2007 (entry into force 2008) with six co-productions and a total budget of $55 million.
2.21Also in our region, Australia has a co-production MOU with New Zealand, which was signed in 1994 (entry into force 1994) with 21 co-productions with a total budget of $162 million.
2.22SPA submitted that it ‘welcomes this new co-production agreement with India but notes that effort towards developing other new agreements has been lacking in recent years, leaving the opportunity for a renewed energy towards expanding this opportunity.’
Obligations
2.23Each party shall designate a competent authority for the purposes of implementing the Agreement. This competent authority can be changed by giving notice to the other Party through diplomatic channels.
2.24AAFI submitted on Article 2 that ‘it would be beneficial to identify these authorities prior to the application of this Agreement given the absence of a central authority like Screen Australia in India’.
2.25Requests for provisional approval of audiovisual co-productions should be made by co-producers prior to the commencement of the making of an audiovisual co-production. The approval will take two stages – provisional and then final approval upon completion of the co-production film. Competent authorities may stipulate additional conditions of approval if they are consistent with the provisions of the Agreement. If approval by both competent authorities is not granted, the audiovisual work cannot be approved under the Agreement.
2.26AIFC submitted that it ‘is concerned that the function of clause 3.6 and the lack of safeguards regarding the protection of creative freedoms may allow either Party to influence content and creative decisions of audiovisual co-productions.’
2.27The competent authorities must ensure that the Indian and Australian co-producers fulfil conditions relating to status. The Indian co-producer shall fulfil all conditions relating to status which are required to be fulfilled for the production to be eligible as an Indian audiovisual work or satisfy the provisions of the Agreement.
2.28The Australian co-producer shall fulfil all conditions relating to status which would be required to be fulfilled if that producer were the only producer, for the production to be eligible as an Australian audio-visual work under Australian legislations and the Agreement.
2.29The producers must not be linked by common management, ownership, or control aside from what is inherent in making the co-production.
2.30Temple submitted its recommendation for ‘a mechanism, particularly from the unregulated Indian film industry, for checks and balances to ensure that genuine film professionals are prioritised and encouraged to apply for coproduction.’
2.31Third party co-productions are possible if either country has an audiovisual co-production agreement or arrangement with a third country and status requirements are met.
2.32An audiovisual co-production is entitled to the full enjoyment of all the benefits which are or may be accorded to national audiovisual works in India and Australia. Temple submitted in relation to Article 6: ‘We would request that the financial benefits rewarded to each nation are in proportion to the physical, fiscal, and creative investment made by each producer from each Country.’
2.33AIFC submitted that ‘such incentives will need to be regularly reviewed and analysed against the incentives provided by various other nations – in particular the United States of America and United Kingdom.’
2.34Parties shall permit (subject to their legislation and laws) entry into and temporary stay in their respective territories of the creative and technical personnel and performers engaged in the co-production, including third-party co-productions. That is in addition to the temporary entry and re-export of any necessary equipment to produce the audio-visual co-production. AIFC submitted on Article 7 that it ‘observes there are no clear provisions within the Agreement or through other existing instruments that ensure such visa applications are dealt with expeditiously or, at least, within a reasonable amount of time.’
2.35Each co-producer should make a financial and creative contribution which is not less than 20 per cent for the audiovisual co-production. Temple said that they ‘advise that the Australian producer’s offset to be deemed as a contribution given that it is an equity provided to Australian[s] from Australia.’ They further said: ‘We also submit that Indian producer contribution be equity contribution not counting any film subsidies from Indian federal or state governments.’
2.36The performing, technical and craft contribution should be in reasonable proportion to each producer’s financial contribution. Location filming can take place in a country other than the countries of the participating co-producers with the approval of the competent authority. AIFC submitted that the process related to this Article is ‘unclear’.
2.37Individuals engaged in the making of the co-production should be nationals of India, Australia or the third country unless there are exceptional circumstances, where the script dictates their participation or when filming on location in another country, in minor roles. That is in addition to restricted numbers of technical personnel who are citizens and permanent residents of other countries. Further, a screenwriter from another country who makes a minor contribution to the script and does not receive a writing credit is allowed.
2.38Unless otherwise decided by the competent authorities, the original soundtrack should be made in one of the official languages and the soundtrack should be made in India and/or Australia and/or the country of any third party. Up until the creation of the first release print or digital equivalent, the co-production should be made and processed in Australia/India/third party country.
2.39At least 90 per cent of the footage included in an audiovisual co-production shall (subject to any departure approved by the competent authorities) be specially shot for that audiovisual work. AAFI submitted on Article 12.3 that: ‘This is a highly prohibitive term especially in regards to non-fiction works.’ ACIC submitted that: ‘This is limitative for documentary productions and request this be around 70% mark.’
2.40There must be a separate credit title indicating that the work is an Indian-Australian or Australian-Indian co-production.
2.41There must be a balance achieved between the Parties with respect to the contribution of each country to the production costs, the usage of studios and laboratories, the employment of personnel and the participation in performing, craft and technical categories including, in particular, the writer, director and lead cast.
2.42Either competent authority may withhold approval of an audiovisual work as an audio-visual co-production on the basis that the overriding aim of overall balance would be prejudiced by approval. Temple submitted that this should only be in exceptional cases ‘with detailed and objective reasons for withholding the approval along with an appeals process’.
2.43The Annex is an implementing arrangement and does not create legally binding obligations.
Revisions, modifications, and amendments
2.44Changes to the Agreement can be made with the mutual agreement of both Parties and would enter into force once the Parties have notified each other that their respective domestic requirements for entry into force have been completed.
Renewal
2.45The treaty will remain in force for an initial period of three years and will then be renewed automatically for further successive periods of three years. Either Party can terminate the Agreement at the conclusion of a three-year period by giving six months prior notice in writing through diplomatic channels.
Implementation and costs
2.46The NIA notes that no new legislative measures are required to implement the obligations under the Agreement. The Agreement will be administered by Screen Australia on behalf of the Australian Government as part of Australia’s International Co-production Program. Further, the NIA explains that while some costs are associated with the administration of the Agreement, these costs will be absorbed by Screen Australia. Direct agency funding of Australia-India co-productions through Screen Australia will be provided from existing funds.
2.47The treaty will enter into force when both parties have notified the other through diplomatic channels that their domestic requirements have been completed. India has notified Australia that it has completed its domestic treaty-making process. Disputes relating to the Agreement will be settled through consultation and negotiation.
Consultation
2.48Consultation took place and the NIA notes that the Trade and Co-production Forum (TCF) an industry consultative group convened by the Department was consulted at ad hoc meetings during the formative stages of negotiations. No issues were raised in these consultations. The TCF noted increased interest in the Indian market from the sector.
Issues
Connection with India
2.49The Committee observed at the public hearing that this is a period in which there are already strong and significant connections between Australia and India which is deepening further. The Committee notes that the basis for strengthening the relationship, particularly between Australians and Indians, not just at the government level, are the things that we have in common.
2.50While the relationship between Australia and India is understandably but misleadingly simplified at times to our shared interest in cricket, the reality is that both nations have some deeper intrinsic values and structural features, including the great benefits that accrue from a free press and an active and culturally diverse civil society. Both countries are remarkable for their geographical scale and biodiversity, and both countries have a rich and ancient cultural history in addition to the more recent influence of English language, British culture, and institutions.
2.51At the public hearing, Mr Sharma from Temple; AAFI, ACIC, AIFC said: ‘On the whole, as I said, this is a prenup between the most prolific and professional film countries.’ He went on to say: ‘What I see … is Australia is benefiting so much from its trade, cultural and artistic links with India. With this treaty, I … look forward to them skyrocketing and us being able to tell more Australian stories that are Indian-centric.’
Approval of audiovisual work
2.52At the public hearing the Committee discussed issues relating to Article 3.6: ‘The approval of an audiovisual work as a co-production by the competent authorities shall not bind the relevant authorities of either Party to permit the public exhibition of the resulting audiovisual work”.
2.53On this issue, Mr Sharma said, ‘rather than censorship at the time of exhibition, what my concerns are—and they are based on previous experience and previous incidents—is censorship in authorising those co-production treaties.’Mr Vyas, from AIFC, said regarding Article 3.6 that ‘there's nothing that I think is necessarily going to be able to bind anything in this treaty to stop, for example, the Indian counterparts from being able to control what is or isn't screened’.
2.54Mr Vyas said the Agreement does not contain anything to ‘ensure that both parties in some shape or form have some sort of provision to point to say that both parties are going to use their best efforts to make sure that we do support that sort of free expression’. Ms Rush from DITRDCA said on this point: ‘Speaking to Australia's incentives, my understanding is that with the producer offset a component part of it is intention to show. If therefore there is a deliberate action or there is no intention to show, they're not eligible for the offset.’
Censorship
2.55The Committee discussed the related issue of censorship at the public hearing and whether there were concerns of this in the Indian film industry or other relevant civil society actors in India.
2.56On this point, Mr Sharma said: ‘There have been issues, particularly with the Hindu mythological films ... In order to cater to a particular line of thinking, there have been issues around censorship.’Mr Sharma went on to say: ‘As a filmmaker I would love to see a similar, if not exactly the same, approach to my stories and my screen content, which I am privileged to receive from Australian exhibition, film funding bodies and other things.’
Australia’s producer offset
2.57The Committee raised the issue of having the value of Australia’s producer offset counted as a contribution to the minimum 20 per cent financial contribution that each country makes to a co-production.
2.58Ms McDonald from Screen Australia said: ‘Our current producer offset guidelines do outline, and we do require, that the value of the producer offset does form part of the contribution from the Australian producer.’
Percentage of original footage
2.59The Committee raised the issue of the Agreement providing that 90 per cent of the footage should be specifically shot for the work and acknowledgment that this may be difficult to meet for a factual film.
2.60Mr Castaldi from AAFI said that: ‘If it's mandated that 90 per cent of the content has to be produced to comply, it could actually impede the documentary maker, the factual maker, in actually pursuing the story as it unfolds.’ Mr Sharma similarly said: ‘If we want students to learn and leave a legacy, that 90 per cent is very prohibitive. Any filmmaker will tell you that a good documentary would not limit itself to a 90 per cent live shooting.’
2.61In response, Ms McDonald of Screen Australia said: ‘If a production has, say, more than 10 per cent of allowed archival they can apply to both competent authorities and have that altered in the context of a production.’ She went on to say: ‘The competent authorities will review that, have a discussion and confirm that makes sense for the film in question.’
2.62Ms McDonald further said: ‘I think the 90 per cent is in all of our agreements and it comes up as a question from documentaries.’ She went on to explain: ‘We do consider it. We talk to our competent authority partner, and then approval is granted really. It's really been quite non-controversial for us from an administrative point of view.’
Competent authority
2.63The Committee inquired about the selection of the competent authority under the treaty.
2.64Mr Sharma acknowledged Screen Australia but with respect to India he said ‘up until a few years ago there was no central body in India with whom we could interact like a Screen Australia in Australia.’ He explained: ‘Now they have brought everything under the information and broadcasting ministry through National Film and Development Corporation, which is the NFDC’.
2.65Mr Castaldi agreed on the role of Screen Australia but said that ‘there's an assumption that Screen Australia would be able to take on the workflow within its existing budget. I don't believe that would work.’ He went on to say: ‘there would need to be an acknowledgement of the fact that this will eat into their human resource and eat into their time, for it to be properly managed.’
2.66The Committee inquired into whether Screen Australia is sufficiently resourced for the management of this prospective and other co-production agreements. In relation to the resources of Screen Australia’s co-production team, it was communicated through a Question on Notice following the public hearing that no additional resources are required to administer the Australia-India Audiovisual Co-production Agreement.
Skills and practice transfer
2.67On the issue of skills and practice transfer, Mr Sharma said: The process is about: ‘Sharing financial standards and ensuring the ethical and legal standing of those financial standards. It is also ensuring various other practices like set-offs.’ Further he said, ‘it will boil down to us sharing the knowledge and the Australian counterparts insisting that a Screen Australia A-Z budget be followed, that a finance plan be followed.’
2.68Ms Rush said: ‘I think skills transfer is an element… The size of production and the complexity of production is something that, whilst we have large offshore productions that are attracted to Australia by the screen incentives offered by the Australian government, we are growing in that sense in terms of our ability to deliver.’
Conclusion
2.69The Committee recognises that India is the world’s largest democracy and the fifth-largest economy. Australia’s relationship with India is its oldest continuous diplomatic relationship with any Asian country, establishing diplomatic relations in 1943. Australia and India also have a strong economic relationship. In 2022, India was Australia’s sixth-largest two-way goods and services trading partner and fourth-largest goods and services export market.
2.70The Committee highlights the value of connecting and collaborating with the Indian film industry. There has been strong interest from the Australian-India film diaspora in ratification of the Agreement. As was highlighted during the public hearing by individuals working in this sector, the Agreement would provide a valuable means to facilitate the sharing of knowledge, skills, logistics and creative abilities. This will benefit the Australian film industry more generally and will provide an avenue for a greater number and broader narrative of stories to be told through audiovisual coproductions.
2.71India is an important partner to Australia on a number of levels. The Committee is therefore pleased that this agreement will continue to enhance the relationship.
2.72Australia and India collaborate bilaterally, regionally, and multilaterally. At the international and regional level, the Prime Ministers of Australia and India interact at major meetings, including the Quad, G20 and East Asia Summit. Bilaterally, through the CSP, both countries are committed to working together on science and technology, maritime cooperation, trade and investment, defence ties, agriculture, education, and tourism. Further, Australia and India hold annual leader-level summits, with Australia being one of only three countries India meets in this way.
2.73The Committee observes that the Agreement builds on existing partnerships between Australia and Indian producers to develop high quality projects. The Agreement encourages screen industry employment, technical development and cultural exchange between Australia and India by facilitating screen co-production. Further, the Agreement increases the output of high-quality productions through sharing investment with India.
2.74The Committee notes support for ratification from the Government and other stakeholders including those from the Australian-Indian film industry. At the public hearing, the Committee explored key issues relating to the Agreement, including Australia’s connection with India, approval of audiovisual work, censorship, Australia’s producer offset, the percentage of original footage, the competent authority and skills and practice transfer. The Committee considers that these issues have been addressed adequately by the Inquiry.
2.75The Committee supports the ratification of the treaty and recommends that binding treaty action be taken.
2.76The Committee supports the Audiovisual Co-production Agreement between the Government of Australia and the Government of the Republic of India and recommends that binding treaty action be taken.