Gaming industry’s prolific growth has stunned the government as well as aficionados. Finally after years of effort by many organisations and studios, union finance minister Nirmala Sitharaman announced at the Union Budget 2022 that an AVGC Promotion Task Force will be established to recommend measures to actualize AVGC ecosystem and to build local capacity to serve markets and global demand. Followed that the year has been eventful for the industry as the Government brought big announcements to regulate the ecosystem they are as follows:
- Appointment of Ministry of Electronics and IT (MeitY) as a nodal ministry for online gaming
- Esports has been recognised as multisports events under Ministry of Youth Affairs and Sports
- Draft rules for online gaming, released by the MeitY. Only games approved by the council will be able to legally function in India, and online games would need to register with a self-regulatory authority. According to the proposed regulations, online gaming organisations will not be permitted to place bets on the results of games. A thorough draft has been made.
- By March 2023, Shillong, Meghalaya, will house India’s first Center of Excellence (CoE) for online gaming, as announced by minister of state MeitY and skill development entrepreneurship Rajeev Chandrasekhar.
So far these are the major steps made by the government since the last Union Budget 2022. On 1 February the Union budget for 2023 will be unveiled, and the business community anticipates that the government will give this sector more attention. The gaming industry leaders anticipate the government to introduce specific regulations, programmes, and other initiatives for games, esports, RMG and gaming content in the 2023 Union Budget to grow the sector.
Here are the industry expectations:
JetSynthesys founder and CEO Rajan Navani
“We look forward to a progressive budget that resonates with the Gen Z citizens of our country who will not only be the largest consumer base over the next decade but also add up to over 27 per cent of our workforce by 2030. We are looking forward to a budget focused towards creating a meritocratic market-based approach to taxation and initiate timely incentives to help prioritize and accelerate areas of development including education and health. This will not only strengthen domestic Bharat but will also establish global leadership.
We were elated when finance minister Nirmala Sitharaman in her budget speech last year had announced the AVGC Task Force to promote the AVGC sector. Taking that forward, we believe that the government shall allocate funds, proactively taking forward the recommendations and financially supporting the sector.
Further, the government of India also officially recognising esports as a multisport event has not only given the industry greater vigor and vitality, but it has also raised expectations from the upcoming budget. With 2023 anticipated to be another high-growth year for gaming and esports, we are expecting a positive budget with concerted initiatives to help the sector across verticals. We are looking forward to progressive regulations and policies, infrastructural improvements, awareness campaigns, tournaments and competitions, training facilities, greater investments and much more.
The online gaming sector will now be regulated by the Ministry of Electronics and Information Technology (MeitY) as the nodal body. This is indeed a very welcome recommendation placing the onus of responsible gaming on industry players. In an emerging area that is innovative, a self-regulatory approach of this nature helps bring in greater investment as well as accelerated job creation opportunities in the economy.
We’re hopeful the upcoming annual budget will direct where we want to be as a nation in the world of online gaming and esports and be a step forward in helping India achieve its goal of becoming a trillion-dollar digital economy by 2025.”
Alpha Zegus founder and director Rohit Agarwal
“There are three major expectations from the 2023 Union Budget.
Firstly, there was a conversation a while ago about changing the GST slab from 18 per cent to 28 per cent for the online gaming segment. We genuinely hope this does not come into effect, since it would immensely affect our growing industry. We are currently on a gradually growing path of increasing in-app spending and purchases related to gaming. Making the slab 28 per cent would set us back to square one.
Secondly, gaming – be it mobile or PC – requires hardware (semiconductors, batteries, etc). We are hoping there are some import duty relaxations on these items, or there is a bigger focus on the ‘Make In India’ initiative for these items. Any of these two actions will cause a drop in hardware cost, which will increase hardware accessibility and upgradability for gamers.
Lastly, we are hoping for internet and broadband services to be made cheaper and more accessible. The greater majority of the Indian gaming audience is from Tier 2 and Tier 3 towns, and a slash in internet pricing would encourage more young adults to take up gaming.”
Reboot Game Studios Co-founder and CEO Tanu Jain
“The gaming industry in India has been growing rapidly in recent years, and we hope that the government continues to support the industry to drive its growth. This could include measures such as tax incentives for game development and investment in infrastructure for the industry. Currently, the goods and services tax (GST) rate that is applicable to the gaming industry is 18 per cent, and we are hoping for it to remain the same, if not lower. An increase in tax would affect the industry drastically, as it might throw the emerging homegrown players off balance who have the potential to contribute towards the country’s economy.”
Gamezop co-founder Gaurav Agarwal
“2023 is likely to be a tough year for the global economy. Against the dollar, developing market currencies, including the Indian rupee, have been under tremendous pressure ever since the talks of the looming slowdown began.
In the midst of this, gaming has the potential to become a sector that brings in export revenue as Indian gaming companies find global users for their titles. I am hopeful that the FM takes note of this and considers a well-defined Duty Credit Scrips scheme for India gaming companies bringing in foreign currency into the economy.”
PlayerzPot CEO Sunil Yadav
“With the Union Budget 2023 right around the corner, we eagerly look forward to its impact on the gaming industry. The upcoming budget can create a more favorable business environment with regards to GST, ease of doing business and that can attract talent from Tier II and Tier III cities too.
India’s gaming industry is expected to reach $8.6 billion by 2027, demonstrating its huge potential for growth. By giving it the attention and importance it deserves, the industry in India is poised for even greater success. In this budget, we hope roadblocks like bans and a lack of regulations get addressed. The AVGC Task Force that was announced last year is a great step to catalyse the industry’s growth, but we believe there is scope to do more in this regard. What will also be interesting is the outcome of a recent proposal in the online gaming policy that involves establishing a self-regulatory organisation (SRO) to handle the registration and approval of games. Primarily, what the industry needs is a proper set of guidelines and rules to grow further.
With the right policies in place, the gaming industry in India has the potential to become a major economic driver for the country.”
Yudiz Solutions chairman and director Bharat Patel
“With the speeding technological innovations, the first priority for the center should be establishing a taskforce for cybersecurity and increasing spending in that area. Recognising the growth of lucrative sectors such as Metaverse, Gaming, and Blockchain we also need to focus on skill development, start with basics, institute infrastructures, and keep exploring the sectors broadly. The AVGC sector should get a tremendous boost as there is huge scope. Our country has the expertise and talent to become proficient with the game development category and publish those games on a global level. The concepts and ideas should be inspired by our mythological stories like Amar chitra katha, Mahabharata, Ramayana, etc. We have talent, concepts, and capability to utilize advanced technologies, just needs a little push from the government bodies to acknowledge it and take necessary decisions.”
Baazi Games chief finance officer Gaurav Kapoor
“Online Gaming is at the cusp of major transition, with the allocation of a Nodal ministry and suggested amendments to the IT Act, we are moving towards a strong structural framework. In wake of these developments, we are hopeful that the 2023 Union Budget will bring in conducive changes that will further aid the growth of this sunrise sector. The need of the hour is to have a progressive taxation regime to help India become a global gaming hub.
We strongly believe that gaming is going to be one of the key sectors in the next five years to drive significant growth in employment opportunities. We hope that the budget will contain announcements that promote Indian game developers and service providers to grow the ecosystem holistically.”
All India Gaming Federation (AIGF) CEO Roland Landers
“AIGF is determined to implement prime minister’s vision for the online gaming sector through the continued expansion and transformation of this industry in India. We have seen a lot of progressive regulatory moves recently in the context of online gaming which has all been very welcome. With the AVGC Task Force’s recommendations for a Game Development Fund and the Annual Gaming Expo, the recognition of the Ministry of Youth Affairs and Sports as the nodal ministry for eSports, and the draft IT Rules for gaming intermediaries, the gaming industry is well positioned to be a torch bearer for Brand India. Since the future of this industry is extremely positive, there is truly a lot for the gaming industry to look forward to. A well-clarified and progressive taxation regime would provide an immense boost to this sunrise sector. Such a move will make gaming a cornerstone of Digital India and be the catalyst for India to achieve its goal of a trillion-dollar digital economy.”
Witzeal Technologies CEO and founder Ankur Singh
“The Ministry of Electronics and Information Technology (MeitY) recently published a draft of rules pertaining to online gaming for public consultation. It is encouraging to have the government supporting India’s burgeoning and promising online gaming industry flourish. We believe that government backing would provide the entire ecosystem with the much-needed boost it needs because the industry is creating opportunities for the start-up space, luring FDI, and boosting the national economy. The sector growth will be further boosted by strengthening the AVGC task force set up, which was established in the previous year’s budget. We also expect the government to take into account the taxation aspect in the upcoming union budget, which would provide Indian businesses with a competitive edge and encourage them to meet international standards.
A profusion of job prospects can then be further tapped by rewarding innovation when a government body or an SRO is in charge of overseeing the entire industry. In addition, we think that a robust digital infrastructure would facilitate the sector’s growth and adapt to new technologies, creating opportunities for gaming studios in India. This will also support the government’s “Make in India” and “Digital India” initiatives. The government’s goal of creating a $5 trillion US economy is something that the online gaming industry wants to support.”
Lakshmikumaran & Sridharan Attorneys partner Asish Philip Abraham
“Certainty and consistency in tax policies in line with international practices is the need of the hour for the sector plagued with multiple tax investigations. Continued momentum set by AVGC task force and progressive tax regime are the demands of the sector. Sector is looking forward for the ‘light-touch self-regulation’, mechanism for setting up of Game Development Fund as recommended by AVGC taskforce. The industry expects a positive push in the budget to make India a global hub for gaming as recommended by AVGC Task Force in their report “Realising AVGC-XR Sector Potential in India”.
It is anticipated that the Budget Speech 2023-24 will also allocate funds for implementation of the recommendations of the AVGC Task Force as well as setting up of the ‘Game Development Fund’. The sector requires positive regulatory support along with progressive taxation for the next phase of growth.
Progressive taxation – Needs of the hour
Tweaking the TDS threshold qua the player from qua the game will have a negative impact on the sector along with hurdles in verifying the threshold across the platform. The TDS amendment may act counter-productive. The UK and France made progressive legislative changes to attract gaming operators moved offshore locations due to regressive tax regime. The Union government will await the recommendations of the GST council on the report submitted by the Group of Ministers (GoM) before announcing any changes in the Budget. The status quo will continue on the GST Rate and Valuation issues investigated by the department.”
Skyesports founder and CEO Shiva Nandy
“We don’t really have any expectations per se for the Budget 2023 as esports is still steps away from official recognition. This will happen when the government recognises a body to be the National Sports Federation (NSF) for esports. While the recognition of esports as a sport is a positive sign, once we have a centralized body then only can the government allocate funds for developing the industry. I hope to see that happen in the coming years.
The private sector also has a crucial role to play in the development of esports in India.
With that being said, as we look forward to the Budget 2023, we hope to see more support for the AVGC sector. This will enable the emergence of more homegrown esports titles like Real Cricket, which will help in the growth of the overall gaming industry in India.”
8bit Creatives founder and CEO Animesh Agarwal
“The esports industry is growing at an impressive percentage and is only forecasted to grow more in the coming years, both in terms of viewership and revenue. In the Union Budget 2022, we hope that the government will introduce measures to support the next phase of growth in the esports sector. The sector eagerly awaits a progressive policy structure from the government as well as consider levying a lower tax slab than the existing 18 per cent. The sector aligns well with the government’s digital economy vision, and we expect the budget to lay out a specific plan for the growth of esports including setting up of a task force, plans for infrastructural development for esports, training programs, youth awareness programs and most importantly an esports vision for India, defining a future state where we want to be. We also need government impetus to invite more investments into the sector, through a mix of ease of business and financial incentives in the budget. With adequate support, the esports industry has the potential for overall economic growth, job creation and contribution to the government’s vision of a trillion-dollar digital economy by 2025.”
FanClash co-founder and CEO Richa Singh
“No one can deny the fact that the esports and gaming industry has turned out to be the fastest-growing sectors in recent times. From business elites to the Indian Government, all are taking notice of the potential it holds for economic benefits. Adding to that, recognising esports as a sport has further added to its advantage.
It is tough to predict much, but it would help the esports sector if the government can allot a decent share of the budget for the esports industry. Indian Esports still has a long way to go and needs attention on funding for research and development, it needs reforms in tax incentives for game developers and esports organizations. More training centres need to be built, we need professional trainers and exchange programs which could be beneficial to strengthen their strategies and be prepared for international tournaments.
Additionally, governments may also consider regulations and policies to support the growth of the industry to minimise risks of fraud, protect the rights of gamers and promote fair competition.”
Revenant Esports founder and CEO Rohit N Jagasia
We hope the 2023 budget will take steps to not only empower the gaming industry but also offer an incentive for the esports ecosystem in the country. This would help bolster technological integration and investment in the infrastructure to create new possibilities for youngsters in the esports and video game sectors. As the gaming industry has been flourishing, we are hoping the Government this time would take notice to offer some more support and protect the interests of this sunrise industry. We definitely depend a lot on direct investments and these investors play a crucial role. We hope they can suggest minimum taxation costs for this segment to attract more investors.
The multisport event tag adds value to the credibility of our new-age sports i.e. esports like any other mainstream sport played in our country and we hope the prize pool winnings of our esports athletes should be exempted from Income tax just like any other sportsperson.
Esports Federation of India president Vinod Tiwari
“We are expecting a favourable move from our government during the Union Budget. Esports in the Indian landscape is progressing. The multisport event tag adds value to the credibility of esports like any mainstream sport enjoyed in India attracting more companies to invest as stakeholders or advertisers. In my personal opinion, the budget needs to be increased and allocated extensively for the growth of esports and the training of athletes. We need to find ways Indian esports can be taken further to the global platform which is only possible with better infrastructure, financial aid, and the right environment to nurture these talents.
It would be a great advantage to the esports community if our Government considers allocating the “Esports Development Fund” similar to countries like Malaysia, Korea etc. which would support Indian gaming studios to build esports video game titles based on Indian history/ethos. Our players need facilities/training centres, advanced gears, boot camps and coaching to be set, we need to provide the top coaches, and other facilities to ensure they get complete support and can perform their best. Not only the government but the Corporates should also start allocating budgets for esports.”
Gamerji CEO and founder Soham Thacker
“We expect the budget to take into consideration the needs of all the stakeholders. The tax implications on the online gaming industry are set to increase from an already steep 18 per cent. This would adversely affect the esports sector as a whole and also deter investments in the sector. We would also like to see a clear distinction in the RMG and online non-RMG mediums of entertainment.
While the future of online gaming and specifically esports seems to be positive, the industry needs government’s support to build a robust infrastructure at the bottom level. The industry needs training centres, esports organisations to tap into that young professionals for building the right set of skills and providing training to the existing talent pool for content creation, game development, designing, art, animation and so on.”
Trinity Gaming India co-founder and CEO Abhishek Aggarwal
The end of 2022 saw major decisions in the industry, recognition of esports as a core sport, appointment of MeiTY as a nodal ministry for online gaming and policies by the AVGC. These decisions will be vital in the growth of the creator economy and influencers. With the budget right around the corner, we look forward to seeing developments around
taxation and regulation of the esports industry. The coming budget and year will be an important one for the industry.
Loco CFO Suhas Khullar
“The Indian esports and video game industry is one of the fastest-growing sectors that also supports other industries, such as IT, animation, and more. The government has already shown intent to support esports by giving the charge to the Department of Sports under the Ministry of Youth Affairs and Sports, which is very welcome. To keep up with this rapid growth, it is important for the government to further develop strong budgetary support through direct allocation and through tax benefits to attract innovations and investments to this sector. Additionally, we also look forward to a streamlined policy framework and guidelines, structured to nurture the growth of this evolving industry.”
It will be interesting to see what this year’s Union Budget has to offer in terms of strengthening the gaming ecosystem.
Orangutan Co Founder Jai Shah
“The Government of India recently acknowledged the esports industry as a component of Multi-Sport events. However, a framework for the laws and regulations regarding GST and other taxation policies relating to prize pools and other financial components of the sector still has to be established. Furthermore, as esports is frequently grouped with other games and real money gaming, the government should create a structure for the sector.”