South India film incentives are governed by separate state policies, not one regional programme. This guide covers Telangana, Andhra Pradesh, Tamil Nadu, Karnataka and Kerala, distinguishing support for qualifying film productions from language-specific, exhibition, infrastructure and AVGC measures.
For the national foreign-production scheme, see our India film incentives guide. The state options below require separate checks of applicant, format, expenditure and payment conditions; eligibility for national support does not establish eligibility for a state programme.
South India Film Incentives and Rebates: How the State Schemes Work
Assess each state programme against the actual project and applicant. Support for a local-language film, an exhibition-stage tax concession and assistance to an AVGC company are different measures and should not be treated as interchangeable production rebates.
Compare any potential recovery with the quoted costs of crew, studios, locations and transport. The production base should suit the brief and schedule independently of an incentive that has not been approved.
State Schemes Side by Side
| Jurisdiction / scheme | What it pays | Who it is for |
|---|---|---|
| Telangana: IMAGE Policy | Up to 20% of production cost for animation, series and gaming (80% of cost incurred in-state), subject to category caps; entertainment-tax exemption for animation/VFX films | Registered animation, VFX and game studios, not live-action shoots |
| Andhra Pradesh: APSFTVTDC | Historic/local Telugu-film support and a 2018 state tax concession; verify current subsidy availability and terms against the operative order. | Qualifying locally registered Telugu productions; not a general incoming-production rebate. |
| Tamil Nadu | Case-by-case entertainment-tax exemption via statutory remission (exhibition stage) | Qualifying Tamil films by government order; no incoming-production rebate |
| Karnataka | Kannada-film support governed by operative state orders; AVGC-XR 3.0 company-side incentives. | Qualifying Kannada productions and registered AVGC firms; not incoming live-action shoots. |
| Kerala: KSFDC | Award subsidy ≈₹5–6 lakh for KSFDC/Chitranjali festival winners | Malayalam and children’s films, with no incoming-production rebate |
Support available to a supplier or local producer should not be entered as a rebate payable to the visiting production.
Telangana: Hyderabad, Ramoji and the AVGC Route
Telangana is where producers most often expect a film cash-back and do not find one. The state’s headline instrument, the IMAGE Policy (Innovation in Multimedia, Animation, Gaming and Entertainment), is an AVGC and gaming policy, its cash incentives are written for registered animation, VFX and game studios, not for a feature or series shooting on location. Its incentives reimburse up to 20% of production cost for qualifying animation, series and gaming work where at least 80% of that cost is incurred in Telangana, subject to category caps, and they are claimed by registered companies rather than by a live-action unit. There is an entertainment-tax exemption for full-fledged animation/VFX theatrical films produced and released in Telangana, which sits at the exhibition stage. For a live-action production filming in Hyderabad, none of this functions as a meaningful production rebate, and we say so up front.
What Telangana Actually Offers
What Telangana genuinely offers is deep production infrastructure. Ramoji Film City, one of the world’s largest integrated film studio complexes, puts sets, equipment, post and on-site accommodation inside a single controlled footprint, which is why large-scale productions default to it. Beyond Ramoji, decades of Telugu-industry volume have built a dense base of independent studios, post houses, dubbing suites and equipment rental, and a crew pool, camera, grip, art, VFX supervision, stunts, available in numbers smaller southern cities cannot match. For a production weighing the south, the comparison rests on quoted infrastructure and production costs, with any incentive assessed separately, and our line producer Hyderabad team builds the budget around those costs rather than around a subsidy that does not exist for live-action work.
Andhra Pradesh: Local Subsidy and Location Range
APSFTVTDC has administered support for qualifying Telugu films alongside a state tax concession, but the current subsidy amount, annual allocation and eligibility must be confirmed against the operative government order before being placed in a budget. This is a scheme for the local Telugu industry; it is not a route an international or out-of-state production can budget against.
Where Andhra Pradesh earns its place on a schedule is location range rather than incentive. The Visakhapatnam coastline, the Araku Valley hill terrain, the Tirupati heritage corridor and the emerging Amaravati capital region give a production genuine visual variety, and the state has signalled a forward-looking film-tourism policy aimed at larger productions. Until that firms up into a published rebate, the practical planning position for AP is locations and the central scheme, and, for qualifying Telugu work, the APSFTVTDC certification pathway.
Tamil Nadu: Chennai’s Depth and a Tax Exemption, Not a Rebate
Tamil Nadu’s financial benefit is an exhibition-stage tax relief, not a production cash rebate, so line producers in Tamil Nadu assess production costs and any applicable support separately. The state has historically applied a local entertainment levy over and above GST, with relief granted to qualifying Tamil films through a statutory remission process and film-specific government orders rather than as an automatic, blanket exemption for every Tamil-title film. That mechanism helps a Tamil theatrical release at the box office; it does nothing for an incoming production’s shooting budget. A dedicated state production-incentive policy has been under discussion rather than in force, and the state’s 2025–26 IT policy note records its AVGC-XR proposal as still under government consideration rather than a published scheme. For a feature, series or commercial shooting in the state, the honest line is that the draw is the production base, not a subsidy.
Chennai’s Crew Base
And that base is substantial. Chennai is one of the south’s largest production cities by crew depth and annual output, with a full-spectrum vendor sector built on year-round Tamil theatrical and OTT work, camera, grip, lighting, art, stunt and VFX crews with major credits, available without import cost. Studio concentration runs through the Kodambakkam and Vadapalani belts, with AVM and EVP among the active studio facilities and Gemini Studios part of the area’s longer production history, backed by a deep post, dubbing and grading network. Chennai’s port and air-cargo facilities, with bonded cargo and ATA carnet handling through established freight agents, also make it the logical entry point for international productions bringing equipment into the south. Our line producer Chennai base coordinates that studio capacity together with cross-state location work, Ooty and the Nilgiris, the Chettinad mansion belt, the Madurai–Thanjavur heritage corridor under ASI clearance, and the Coromandel coast.
Karnataka: Bengaluru’s VFX Base and the AVGC-XR Scheme
Karnataka has two distinct schemes, and neither is an incoming-production rebate. Karnataka has historically offered award-linked support for qualifying Kannada films, with the current amount and application window governed by the operative state order; either way it is directed at Kannada films rather than at incoming shoots. Separately, the AVGC-XR Policy 3.0 (2024–2029) supports the animation, VFX, gaming and extended-reality sector, but its incentives are company-side reimbursements, IT infrastructure, leased office space, server and compliance costs for registered AVGC firms, not a rebate a production claims for shooting a film. If your project places real VFX or animation work with a registered Karnataka studio, the AVGC-XR route can apply to that vendor; it is not a shooting incentive for the live-action unit.
Talent and Cost, Not Cash
The practical advantage Karnataka offers a production is talent and cost rather than cash. Bengaluru’s technology sector has produced one of India’s strongest VFX, CGI, motion-capture and post-production talent pools, now routinely used on both Kannada features and pan-India OTT work, and the city’s large English-speaking crew base is a real day-to-day asset for international productions. Innovative Film City at Bidadi provides controlled studio environments and set-build capacity, and the state’s location range, Hampi’s UNESCO heritage, Mysuru’s palaces, the Coorg hills and the Western Ghats, can offer competitive logistics where the crew, post-production and studio work are based in Bengaluru rather than imported from another production centre. Our line producers in Bengaluru typically cover both the studio base and that out-of-city corridor within a single footprint.
Kerala: Award Subsidies, Not an Incoming-Production Rebate
Kerala is the clearest case of expectation outrunning reality. The state has no general cash rebate for incoming or international productions. The Kerala State Film Development Corporation (KSFDC) runs small award-linked subsidies, in the range of ₹5–6 lakh, for Malayalam and children’s films produced using KSFDC and Chitranjali Studio facilities that go on to win at state, national or international festivals. The Kerala State Film Policy approved in March 2026 is a substantial document, but its thrust is labour protection, gender justice, recognising film as an industry, and financing facilitation through development and venture funds, not a production cash-back to attract outside shoots. Kerala’s direct incentive is minimal, and Kerala shoots are planned around the brief, location access, crew availability and quoted costs.
Why Kerala Stays on the Schedule
Those locations are the reason Kerala stays on so many schedules regardless. Kochi works as a production base with a growing crew and post sector; the backwaters around Alappuzha and Kumarakom, the Munnar tea country and the broader Western Ghats corridor offer water, hill and forest environments that are hard to match elsewhere in peninsular India. Forest-department and backwater permits carry real lead times, which is precisely where day-one planning pays off, and an experienced line producer Kerala coordinates location permissions and any separately agreed incentive documentation.
Testing Central and State Incentives Separately
The workable strategy is to identify the applicable central route first: the foreign-production incentive or the official co-production incentive. A state programme should enter the budget only where the production independently meets its format, applicant, language, expenditure and release conditions. Any proposed combined recovery remains provisional until the relevant authorities confirm the treatment.
A production should assess these routes separately. The applicable central or state claim belongs to the production, while vendor-side AVGC support belongs to the registered supplier:
- Central route: the India Cine Hub reimbursement, taken either as the foreign-production route or, for a treaty co-production, the official co-production route, never both; the applicable rate, bonuses and cap are confirmed on the national guide.
- Independently eligible state programme: a local subsidy or tax relief only where the production meets that state’s own format, applicant, language and release conditions, such as the APSFTVTDC subsidy for a qualifying Telugu film.
- Vendor-side AVGC support: animation or VFX incentives routed through a registered Telangana or Karnataka studio, which belong to that registered vendor rather than the live-action production.
Budgeting a Multi-State South India Shoot
Build the budget by state and production requirement: crew, studios, locations, equipment, accommodation, transport and company moves. Keep costs attributable to each location and supplier so that any proposed state claim can be assessed against the relevant policy.
Record potential incentive recovery separately from gross production costs. Confirm the applicant, qualifying expenditure, supporting evidence and payment conditions before relying on that recovery in the financing plan.
The Line Producer’s Role
A South India production team can compare the proposed locations, supplier costs and applicant arrangements, then agree the scope of any incentive assessment and application support. Each potential claim requires its own evidence and timetable; the relevant authority determines eligibility and payment. For the wider comparison, see India film rebates by state.
