F1 is a massively expensive venture with hopes of making money in short term almost non existent. However, it is much more than a car race and this is why multiple countries, including India, are willing to take this multi-million dollar gamble.
F1 is an expensive business. Hosting an F1 Grand Prix could cost the promoters up to $100 million or even more than that on an annual basis. Margins for profit are thin, if any at all. And yet several cities and countries are actively trying to bring these races home. They are all eager to take this multi-million dollar gamble despite the risks involved.
The F1 calendar has now expanded to 24 races but more entrants are hoping they would also get a slot. One of those is India.
Reports on Monday suggested that the
sports ministry is trying to revive the Indian Grand Prix which ran from 2011 to 2013 before coming to a screeching halt due to tax issues. The then Uttar Pradesh government, which hosted the race at the Buddh International Circuit, refused to give tax concessions to F1 and instead classified it as entertainment to levy money on everything connected to it.
However, now the current government wants to resolve the taxation problems in a bid to bring F1 back to the Buddh International Circuit. And the move makes a lot of sense, especially with India’s increasing sporting ambitions.
Why tax exemptions for F1 will be a calculated move?
F1 is undeniably expensive. Hosts have to pay $20-60 million to F1 to get the contract for these Grand Prix races. In addition to this comes all the other expenses that the hosts will have to incur to have successful races. It is almost impossible to make money in the short term with these events. However, an F1 race today is just not about money.
India is aiming to put itself on the global sporting map. The dream is to bring the Olympics home in 2036. It still remains a decade away but the preparations have already begun. And one part of these preparations could be to bring F1 back to the Buddh International Circuit.
While F1 is not a part of the Olympics, it is a sport with global following, especially among the elites. An Indian Grand Prix might become a gateway for these fans to know the country which could lead to a boost in tourism as well. If marketed well, India will not only sell the race but showcase the country and culture as a whole.
Key to Olympic dreams
At the same time, successfully hosting a Grand Prix annually will be a big statement in India’s bid to host the Olympics.
That the current dispensation wants to bring the Olympics to India in 2036 is not a secret. Prime Minister Narendra Modi has consistently said that he wants India to host the Summer Games of 2036. With multiple cities in competition, edging them out would not be an easy task. This is where something like a regular Grand Prix will help.
A high-profile spectacle such as an F1 race helps proving capability to consistently deliver big-ticket events. This is something the country is trying to do by hosting the 2030 Commonwealth Games. The Indian Grand Prix will be a serious addition to that portfolio.
The government might have to face some losses in the attempt to revive F1 in India but it is definitely a risk worth taking. And who knows, if done correctly, the Indian Grand Prix could become an annual racing carnival like it is in some of world’s cities.
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