The tiny-budgeted film Tanna, by Australian directors Bentley Dean and Martin Butler, has fallen short of continuing its remarkable journey to the Oscars.
The film, the first Australian production to earn a foreign language Academy Award nomination, missed out to Iranian film The Salesman, by Asghar Farhadi.
Farhadi did not attend the awards in protest of Trump's proposed travel ban of seven predominantly Muslim nations, including Iran.
Tanna was shot with villagers on the small island of Tanna in the Navhal and Nafe languages with cameras and other gear powered by solar panels because there was no electricity.
In a statement read on stage, Farhadi said his absence was "out of respect for the people of my country and those of the other six nations who have been disrespected by the inhumane law that bans entry of immigrants to the US".
"Dividing the world into 'us' and 'our enemies' categories creates fear, a deceitful justification for aggression and war," the statement said.
The win is Farhadi's second. He also won the best foreign-language film Oscar in 2012 for A Separation.
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