Navigating the Evolving Indian Gaming Landscape: Calls for Distinct Policies

In a pivotal move, a coalition of 70 video game studios and esports companies, including industry leaders like Dot9 Games, Outlier Games, and SuperGaming, have united to advocate for a comprehensive policy framework that clearly distinguishes between video games and real-money games (RMG) in India. This letter, addressed to the Prime Minister's Office (PMO) and the Ministry of Information and Broadcasting (I&B), comes as the newly re-elected National Democratic Alliance (NDA) government, led by Prime Minister Narendra Modi, begins its third term and focuses on regulating the rapidly growing online gaming sector.

Unlocking the Potential of India's Gaming Powerhouse

Defining the Distinct Identities of Video Games and Real-Money Games

The gaming industry is advocating for the creation of two separate categories within the Indian policy framework – video games and real-money games – to accurately capture the unique nature of each sector. The letter, reviewed by Moneycontrol, emphasizes the need for the I&B ministry to be designated as the nodal agency for video games, with the proposal to establish a dedicated AVGC-XR (Animation, Visual Effects, Gaming, Comics, and Extended Reality) wing within the ministry, led by a joint secretary-level official.

Streamlining Regulations and Fostering Growth

Among the 10 recommendations outlined in the letter, the industry is pushing for a clear distinction between video games and real-money games in the policy framework, the establishment of a Catalyst Fund to support startups and MSMEs in the gaming sector, and financial incentives such as a reduction in GST on video games from 18% to 12% and corporate tax holidays to attract investments.The industry also seeks measures to improve higher education in game development, recognition of digital IP as collateral for business loans, and support for video game conference organizers, as well as the rationalization of import duties for development hardware.

Aligning with Global Standards and Avoiding Restrictive Approaches

The letter highlights the need for India to align with global standards in regulating video games and avoid following China's restrictive approach. The companies believe that implementing equitable policies can set a positive example for the Global South and position India as a leader in the gaming industry.

Navigating the Regulatory Landscape: Challenges and Opportunities

The industry claims that the lack of clear differentiation between video games and real-money games has led to confusion and regulatory challenges. The recent GST amendment in October 2023, which placed real-money games in the 28% tax bracket while video games remained at 18%, has resulted in unfair treatment and operational difficulties for video game companies.

Unleashing the Untapped Potential of India's Gaming Sector

Harish Chengaiah, the founder of Outlier Games, emphasized the industry's immense potential, stating, "The Indian video game industry is projected to reach .6 billion by 2029, surpassing the cumulative revenues of all Indian film industries and becoming the largest entertainment industry in India before the end of this decade."India is the fastest-growing games market in Asia, with combined mobile, PC, and console gaming revenue projected to reach 3 million in 2024, according to Niko Partners. The market is expected to surpass billion in revenue by 2025, underscoring the need for a comprehensive policy framework that nurtures the growth of the video game industry.

Seeking Collaborative Solutions: Industry Engagement with Policymakers

The gaming studios have requested a meeting with the PMO and the I&B ministry to discuss the unique circumstances of the video games industry and seek guidance on the way forward. This collaborative approach aims to streamline regulations, improve operational efficiency, and foster an environment for the industry's growth, ultimately positioning India as a global gaming powerhouse.