Primus Partners and The Foundation for Economic Growth and Welfare (EGROW Foundation) have collaborated on a thorough study paper titled 'India's Booming Online Gaming Industry: A Potential Powerhouse.’ This research offers light on India's rapidly expanding online gaming business and its major influence on the Animation, Visual Effects, Gaming, and Comic (AVGC) industry, which is expected to develop at a rate of 68 per cent by 2026.
As per the results, the online gaming business is growing as a significant contributor to India's economy, with the potential to become a key employment creator in the future years. From 2018 to 2023, the sector's employment expanded at 97.5 per cent compound annual growth rate (CAGR). The female engagement has increased at a CAGR of 103.15 per cent during the same time which is noteworthy, demonstrating its appeal across gender lines.
Charan Singh, CEO and Founder Director of the EGROW Foundation, emphasised the industry's economic significance, noting, "With 455 million gamers in 2023, India will have the world's second-largest gaming community after China." This growing industry not only provides job opportunities, but it also has the ability to attract foreign direct investment (FDI) and encourage innovation in related areas such as fintech, cloud services, data analytics, and cybersecurity."
Nilaya Varma, Co-Founder & CEO of Primus Partners, highlighted India's growing online gaming industry and said, "The sector is poised for substantial growth, contributing significantly to the Media & Entertainment (M&E) industry, with projections indicating a rise from 3.4 per cent in 2019 to 12.6 per cent by 2026."
The paper also notes three major hurdles impeding the sector's growth trajectory. The most significant of them is regulatory ambiguity, which is worsened by delays in the establishment of Self-Regulatory Bodies under the IT Rules. Such uncertainties have enabled offshore firms to acquire market share, posing a danger to local competitors. The recent regulatory changes, including as retrospective taxation measures totalling Rs 1.2 lakh crore and a 28 per cent deposit tax, have also created worries among industry players. If not handled swiftly, these actions have the potential to jeopardise the sector's economic viability and future growth.
The paper advocates for immediate regulatory clarification and policy reforms to foster long-term growth. Recommendations include amending IT Rules to provide a national regulatory framework, clarifying retrospective taxation, and notifying the National Policy for Promoting the AVGC Sector.
The report says despite these hurdles, India's online gaming business has outperformed other major gaming nations, with a spectacular 30 per cent CAGR from 2017 to 2023. With the correct policy support, the industry can capitalise on its enormous potential, attract international investment, and develop a dynamic ecosystem of innovation and employment in the years ahead.
