The Russian proposed plans to cut the number of foreign films shown in local cinemas by 50% have been shelved by the country’s parliament.
The State Duma canceled a debate on the idea, saying that introducing a quota would be “superfluous”.
The decision comes just days after President Vladimir Putin spoke out against the draft bill.
The bill was submitted earlier this year when relations between Russia and the West began to sour.
“Today, regulating film exhibition by introducing quotas on Russian or foreign films would be superfluous,” Leonid Levin, head of the Duma’s committee, said.
The Motion Picture Association of America, the US body which represents Hollywood studios and gives US movies their ratings, has welcomed the decision.
Speaking to Variety, Chris Marcich, the association’s president, said: “We welcome the remarks by President Putin. We have long enjoyed close relations with Russian film-makers and have a shared interest in a healthy local market.”
The draft bill was submitted to the Duma, Russia’s lower house of parliament, in March by Robert Schlegel, a member of the United Russia party.
Robert Schlegel said that a quota would attract more investors to the Russian film industry and allow the Russian government to make back money from their investment in the Russian film world.
Speaking last week, President Vladimir Putin said he did not think it would be right to impose such a ban.
“It wouldn’t be correct to limit our consumer when it comes to products people generally want to have. And films belong to those major products,” he said.
Vladimir putin added: “The Americans are talented and successful people and there is a lot we can learn from them.”
The move could have cost Hollywood studios dearly.
Out of the top 20 grossing films at Russia’s box office this year, only two films were made in locally, with Transformers: Age of Extinction the most popular, having taken $45.2 million.
Foreign films are currently limited in China, where in 2012 the government introduced a strict quota of allowing just 34 foreign films to be screened there each year.