As we all know, the Union Budget for the upcoming 2023-24 year is to be declared soon and the whole industry is looking forward to it. With a lot of expectations, the Indian Gaming industry also looks eager to see some alignments made to this sector specifically because it’s been growing and has become a billion-dollar industry, however, with government support it is expected to reach new heights.
Indian Esports saw a sharp rise in popularity in 2022. With milestones like the Indian Dota 2 contingent winning a bronze medal at the Commonwealth Esports Championship and esports being included as a medal sport in the Asian Games 2022 (to be held in 2023).
As per gaming-focused venture capital fund Lumikai’s recent study, the esports industry, (barring real money and fantasy gaming), is expected to grow to USD 4 billion by the fiscal year ending March 2027, compared to USD 1.1 billion in 2022.
Recently, in a historic move, The Indian government has officially recognised esports in the country. Esports will now be a part of the “multisports event” category in India under the Ministry of Youth Affairs and sports.
Government spending on sports has been rising over several years. Expenditure on the Department of Sports under the Ministry of Youth Affairs and Sports has increased from Rs 657 crore in 2011-12 to around Rs 1,749 crore in 2021-22. According to budget estimates, this has gone up further to Rs 2,123 crore in 2022-23.
As we know that Finance Minister Nirmala Sitharaman will present the Union Budget 2023-24 in Parliament on February 1, 2023. Here is what the Indian gaming industry as a whole expects from the upcoming union budget:
1. Esports Federation of India
Spokesperson: Mr. Vinod Tiwari, President, Esports Federation of India
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
2. FanClash, Asia’s Largest Esports Fantasy Platform
Spokesperson: Richa Singh, Co-Founder and CEO of FanClash
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 minimize risks of fraud, protect the rights of gamers and promote fair competition.
3. 8bit Creatives, India’s leading esports consulting and talent agency
Spokesperson: Mr Animesh Agarwal, Founder & CEO, 8Bit Creatives
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%.
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 & 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.
4. Revenant Esports, one of the fastest-growing Esports organizations of South Asia and the Middle East
Spokesperson: Rohit N Jagasia, Founder and CEO of Revenant Esports
We hope the 2023 budget will take steps to not only empowering to 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.
5. Orangutan is a multi-faceted organization operating in three verticals – Esports, Talent Management and Apparel.
Spokesperson: Jai Shah, Co-Founder, Orangutan Gaming
The esports industry has recently been recognised by the Government of India as a part of the Multi-Sport events. However, there still needs to be a structure formed for the rules and regulations towards GST and other taxation policies related to the prize pools, and other monetary aspects in the industry. Further, the government should form a structure for the esports industry, as it has often been categorised as real money gaming and other forms of games.
6. MPL, Mobile Premier League
Spokesperson: Sai Srinivas, Co-founder and CEO MPL
2023 is already shaping up to be a watershed moment for the gaming industry. With the government releasing draft online gaming rules earlier this month, the burgeoning sector will see a lot more success this year.
In addition to this, the industry hopes to get clarity in a few areas. The first is the GST mechanism on online gaming. We hope the government provides clarity on the tax slab applicable on skill gaming. Another relates to the AVGC fund set up as part of the AVGC Promotion Task Force announced in last year’s budget. Access to financial support, as envisaged under this, will be a tremendous boost to young talented developers and designers, and will accelerate the push to ‘Create in India’ and take made-in-India games to the world.
We believe that India’s online gaming industry can truly lead the charge in the global digital economy and a uniform, the progressive policy can be the wind in its sails.
7. Rohit Agarwal, Founder & Director, Alpha Zegus, the next-gen marketing agency specializing in the domains of gaming & lifestyle:
There are 3 major expectations from the 2023 Union Budget.
Firstly, there was a conversation a while ago about changing the GST slab from 18% to 28% 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% 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 & broadband services to be made cheaper & 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.
8. Mr. Sunil Yadav, CEO, PlayerzPot
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 favourable business environment with regard to GST, and 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.
9. Paavan Nanda, WinZO’s Co-Founder
“The online gaming industry has the potential to scale rapidly and become a significant contributor to the Government’s vision of a trillion-dollar digital economy. The industry is currently in its nascent stage, and needs stability and clarity from a tax and compliance perspective. The proposed 28 percent GST on the Gross Gaming Value of all games played, over the current 18 percent on the commission of the gaming companies, would have an existential impact on the segment. Further, a reduction in the TDS threshold, from the current winnings exceeding INR 10,000, could also impede the growth of the industry. The TDS liability on winnings above 10,000 already stands at 30% under the Income-tax Act of 1961. The increase in GST and TDS cumulatively would completely wipe out the homegrown industry that has the potential to be the largest next generation of exports of consumer tech products made in India for the world. In this budget announcement, we are hoping to see a continuation of the current GST slab and TDS threshold as a sharp increase in tax will deter growth, sink early-stage startups further into losses and overall make the industry unviable. A clear and supportive tax policy will not only generate revenues for the exchequer but will also create great value in the long run for the country and the gaming ecosystem.
In last year’s budget, the government recognised the gaming sector as one of the potential segments for job creation in India and set up the Animation, Visual effects, Gaming, and Comics (AVGC) promotion task force to realise the potential of the segment. We are hoping for the announcement of constructive action in that direction to give a boost to the gaming industry”.