The news of Indian GP being dropped from 2014 calendar is hardly a surprise for a lot of us who understands the know how of a country hosting a GP. By no means it is easy for a budding F1 nation to host a GP, it needs some years to establish itself but in F1 world time is short. More so when there are different countries eyeing to host a GP themselves. India joined the list as a big potential market for the F1 business and still remains that. If you ask any team officials they would simply answer that, “yeah, surely we would want to have a race in India.” We have already heard from drivers that it is one of the best tracks to drive among the new tracks and lot of them added that it can match with the iconic race tracks. But it’s unfortunate that some off track problems has crept in and now India stands to lose it’s hosting rights for 2014 at least. Many would say it will comeback in 2015 and 2016 but there is lot of time for that to happen and in F1 things change quickly.
Lot of us ask as to what the problem is exactly, from Bernie’s words it’s “political” but I think it’s a lot more than that. We would never know what went on between the Jaypee group & Bernie other than the overview that only to slot it in the early date, Bernie had to drop the race in 2014 and have it in 2015. There are issues of tax, custom, visas which the teams, officials have to go through but one would guess that those are manageable. The major hurdle I believe is less of Government support and in a country like India, for anything to happen, you need the support. Government tends to get all the profits it can when the race happens but they give little support to ease everything and get it done quickly. I feel that it will take some effort to make the Government understand the importance of the sport. It's harsh on fans complaining that Government only supports cricket and not F1, it's simple logic that if a nation excel in something then there will be support which should be the case naturally. But yes as I said that on a certain level they can at least ease some of the stringent process so that the teams and officials can visit India without much trouble. There is indeed lot of tourist coming in during the GP with tickets being cheap for a lot of European nations.
My feeling is that no doubt that Jaypee has done a fantastic job in bringing the race but there still a lot to do in terms of setting the base. There has been good amount of turn up during the race weekend but one could guess that there were a lot of them who didn’t go for the race, I know a lot of them. It’s an expensive sport, no doubt but I can say that the Indian mentality is such that they only see the price and nothing else. This makes it a lot tricky for Jaypee, they can’t put a very low price and they can’t go for a very high. Till now I feel the prices have been in a good range and affordable considering the number of days.
I think in a current scenario, it is a lot better for Indian GP to happen once in every two years so that it establishes itself in the F1 calendar for a long period of time. It’s a hard to thing to say as a F1 fan but this could give the track a lifeline and help the sport to grow gradually. Talking about early date of 2015 if it happens, I don’t think heat will an issue for the teams. My major issue is heat for the fans, the die-hard fans may come any way but for a new fan, they would rather want to stay back at home. And also during April, it’s the IPL time and that would largely hinder the fans number or it could with many deciding to go for cricket.
We all know that the Indian GP has been dropped for 2014 by this stage, and naturally it has caused massive disappointment within the small, but ever-growing, Indian Motorsport community. However, it is of my opinion that this decision is actually a good thing.
Everybody understands that Bernie Ecclestone controls Formula One. Naturally there is influence from the governing body (the FIA) and the commercial rights holders (CVC), however Bernie gets his way more often than not. So to truly understand the future of the Indian GP, we need to determine what Bernie wants. It is pretty clear that Mr. Ecclestone wants an Indian GP, not only has he stated this on many occasions but the market is potentially massive due to the high population which could mean a lot of revenue for Formula One. Add to this the fact that the previous two races have been fantastic events with pretty much unanimous praise, and the future of the race seems to be a no-brainer.
The one issue Bernie has with the race is the position it sits on the calendar. The previous events have been the 17th race of the season, between Korea and Abu Dhabi. However Bernie appears to want the race to take part during the early Asian races (Malaysia, China, Bahrain), my guess would be race four after China.
Last week, Formula One had a big problem when it was announced that the Austrian GP was returning to the sport. The announcement meant that 21 races were contracted for 2014, 22 if you count the Japanese GP which doesn't currently hold a contract but is expected to be on the calendar. Logistically, the teams' do not want to go over 20 races a season and therefore an issue emerged.
The shrewd Bernie Ecclestone used his genius to come up with a solution however. Back in 2010, India was given a five-year contract to host F1 events. Two years of this contract have been completed, three years if you include the 2013 Indian GP this season. That means there is two years left to run. As previously mentioned, Bernie wants the race at the start of the season - so he has decided to move it. However, the Buddh International Circuit is one of only three privately-funded circuits on the calendar. What this means is that financing the event is a struggle, due to a lack of government support (which I think is good actually, but that's another topic). Paying for the event in October 2013 and then early (probably April) 2014 would mean two races at the track in less than seven months, the finance simply do not allow that. As such, the race has been dropped for 2014, to return at its new early slot in 2015. Essentially Bernie has killed two birds with one stone, he loses a race from the calendar - and helps the Indian GP move into its new April-ish position.
What about even further into the future however? Well, the race will go ahead in 2015 & 2016 to see out the current contract, but after that, it gets a little complicated. Bernie will be keen to see the Indian GP retained due to the market size however there are many tax issues surrounding the event. In basic terms, the Indian Government request 1/19th of all income that a Formula One team makes each season. A similar thing does happen in other countries, maybe under the banner of "import tax", however other countries realise that F1 is good for their nations and charge a % of profit, rather than income. This is a huge difference. The majority of Formula One teams do not make a profit and therefore in most countries, they will pay nothing. However, all Formula One teams make income (through prize money, sponsorship and merchandise mainly), and that's what the Indian Government want a percentage of. It means that teams have to pay quite a lot in India and nothing in other countries. Also, if you look at the values and ignore the terms (profit and income) - India's stands at 1/19th whereas in other nations that figure is much less.
Given that India will have a race in 2016, and with the Indian Motorsport fanbase rapidly increasing, I am hoping that between now and then the Government will see a large increase in average number of spectators at the event and also more income through tourism that they realise the GP is important for the country and then they will drop the extortionate tax levels. If not, then that could be an issue, but with Bernie firmly on our side, I'm hopeful about the future of the race. Anyway, who knows what could happen by 2016, F1's future as a whole is not particularly secure, there could be breakaway series' and all sorts by then. Let's just be thankful for the fact that we have an World class racing facility for now.
Naturally Auto India Sports cares very much about the Indian GP. We strongly suggest that everybody who reads this article should go to the 2013 race! Not only will it be a wonderful weekend, but in a very small way you will be helping to development of Indian Motorsport.
Go to the race, take your friends. Support India. Support Motorsport. Support Indian Motorsport.
Tickets available now here.