Mumbai: A growing number of Hindi films are missing out on theatrical release in the UAE, and with it a key source of good box-office revenues, overseas distributors and domestic producers told ET. After Sky Force, The Diplomat and Dhurandhar last year, Border 2 is the latest Bollywood film that has been banned in the Gulf nation where 35-38% of the population is of Indian origin.

"The UAE is a big market in terms of box-office potential," said Pranab Kapadia, founder of Moviegoers Entertainment, a major overseas distributor of Bollywood films. "Malls are a big part of the culture in the region. Due to the hot climate, people prefer to visit malls, which in turn boosts footfalls in film theatres. A big film which is well-received can easily earn 25-40% of its overseas revenues from the UAE region."

For a non-event or non-spectacle film, the UAE market contributes 15-16% of the total revenues in the overseas markets, experts said.

A fundamental reason behind the banning of certain Hindi films in the Gulf region is the divisive geopolitical elements contained in them, producers said.

"The criterion of the UAE authorities is clear. They don't want to disturb the peace and harmony of the multi-cultural or cosmopolitan fabric of the region," said Anjum Rizvi, a veteran film producer. "So, even if they have an inkling that a certain film may create chaos in the region, they don't release it." Veteran producers said makers of films are mostly aware of this.

"Producers are well-aware of what to expect from the censor/classification boards of each of the major international territories. They factor in the risk and adjust box-office potential upfront when making and releasing such films," said Shariq Patel, former CEO at Zee Studios.

It's a significant risk. Hollywood and Indian films each form 40-50% of the UAE box office collection, followed by Arabic films, experts noted. "The Gulf countries have emerged as a structurally critical overseas market for Indian cinema, not a peripheral one. For large-scale Indian films, the Gulf has become one of the most decisive overseas markets," said Suniel Wadhwa, cofounder and director at Karmic Films.

A recent big budget film that lost out on the box office potential of the UAE is Dhurandhar. The film collected Rs. 997 crore (gross) in India and Rs. 294 crore (gross) from overseas markets until Friday, according to box-office research data firm Sacnilk.

"Dhurandhar collected $28 million from overseas markets without the Gulf markets. The absence of the UAE region translates into a revenue loss of $5-8 million, or Rs. 45-72 crore at current exchange rates," Wadhwa said.

"Beyond the revenue loss, an unreleased film in the UAE region is also susceptible to unregulated consumption (due to likely high demand from Indians in the Gulf), which can affect its performance in other territories," he added.