Budget 2024: Gaming sector calls for regulatory backing, funds

Let them game: With the gaming sector projected to surge by 35 to 40 per cent even after regulatory challenges in real gaming, the industry bats for more support to develop e-sports at grassroots, eventually propelling “Create in India” for the sector.

The sector has seen growth globally, but regulations on real-money gaming by the Finance Ministry as well as the Ministry of Electronics and Information Technology have clouded perceptions for the sector.

On Monday, the Supreme Court sought responses from the Centre and others after the E-gaming Federation filed a plea against the 28 per cent Goods and Services Tax (GST) levied on all forms of online real-money gaming.

The emergence of the animation, visual effects, gaming, and comics (AVGC) sector has had a positive influence on the gaming industry, propelling it towards rapid growth, according to Grant Thorton.

The rise of e-sports is a positive development amid regulations on real-money gaming, and home-grown e-gaming platforms are banking on the rise of grassroot level growth in e-sports for government to relax regulations and allocate budgets in the arena.

Roland Landers, CEO, All India Gaming Federation feels there have been significant regulatory strides in the online gaming sector, and batted for self-regulation in the sector.

“We anticipate progressive allocations to be made towards the sector in the upcoming union budget, including towards the implementation of IT Rules for online games and the establishment of self-regulatory bodies,” he said.

Sectoral Potential

As per Invest in India, India is the world’s largest mobile gaming market in terms of App downloads. The sector is expected to  grow by 20 per cent by FY25 to reach Rs 231 billion.

We look forward to budgetary allocations aligned with the AVGC policies, in line with the recommendations of the AVGC Task Force's report from the Ministry of Information and Broadcasting, Landers said.

Along with Landers, Suhas Khullar, Chief Financial Officer of e-sports and game streaming platform Loco sought efficient implementations on the task force recommendations in skill development programs for the animation, visual effects, gaming, and extended virtual reality (AVGR) sector.

“The momentum in Indian gaming is fuelled by supportive regulations and a maturing customer base. With the recognition of e-sports as a mainstream sport, grassroots initiatives are visible across Bihar, Tamil Nadu and MP for nurturing talent and propelling India's esports landscape,” he said.

Notably, the India Gaming Market size is estimated at $3.49 billion in 2024 and is expected to more than double to $7.24 billion in five years by 2029 at a CAGR of 15.68 per cent during the forecast period according to a market research firm, Mordor Intelligence, data.

Government Consultation

Khullar batted for efficient implementations of the draft amendments to the IT (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 in relation to online gaming, as companies pivot to a more non-money model for competition.
He also sought the establishing of skill development programs for the sector.

“We anticipate efficient implementation of its recommendations, particularly the establishment of skill development programs, to bridge the gap between India's massive gamer base and its nascent content creation and game development capabilities,” he noted.

The dedicated allocations for skill development and tax incentives for the AVGC sector will catalyse ‘Create in India’ in gaming, Khullar added.

We envision this budget to be a symphony of support, by aligning regulatory clarity with fiscal incentives and strengthening legal infrastructure to encourage growth, Landers added.

The emergence of the animation, visual effects, gaming, and comics (AVGC) sector has had a positive influence on the gaming industry, propelling it towards rapid growth.