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India’s Online Gaming Industry Poised for Exponential Growth: EGROW Foundation and Primus Partners Report

The Foundation for Economic Growth and Welfare (EGROW Foundation), in collaboration with Primus Partners, has released a comprehensive research report titled “India’s Booming Online Gaming Industry: A Potential Powerhouse.” The report highlights the rapid expansion and immense potential of India’s online gaming sector, projecting its contribution to the AVGC (Animation, Visual Effects, Gaming, and Comic) industry to rise 68% by 2026.

The findings reveal that the online gaming industry is emerging as a major employment generator. From 2018 to 2023, the number of employees in this sector grew at a CAGR of 97.5%, with a 69.88% CAGR among the male workforce and an impressive 103.15% CAGR among the female workforce. This sustained growth underscores the industry’s broad appeal and its potential to create significant economic opportunities.

Dr. Charan Singh, CEO & Founder Director of EGROW Foundation, noted, “The Indian online gaming industry is a significant contributor to our economy and a vital source of employment and innovation. With 455 million gamers in 2023, India boasts the second-largest gaming community globally after China. This thriving industry offers significant opportunities to attract FDI, create employment across various sectors and enhance investment. Additionally, it is expected to stimulate allied industries such as fintech, cloud services, data analytics, and cybersecurity.”

Adding his perspective, Nilaya Varma, Co-Founder & CEO of Primus Partners, stated, “Overall, the Indian online gaming industry offers a vibrant and promising landscape, full of potential for economic growth and job creation. However, navigating the recent changes in the GST framework will be crucial for online gaming platforms to maintain their growth trajectory.”

Despite its promising growth, the report identifies several key issues hindering the sector’s progress. Regulatory uncertainty, delays in establishing Self-Regulatory Bodies under the IT Rules, and retrospective taxation measures totaling INR 1.2 lakh crore are cited as major challenges. Additionally, the recent amendment imposing a 28% tax on deposits has prompted some firms to seek a lower tax rate and a return to the earlier valuation method based on gross gaming revenue.

Key highlights of the report include:

The online gaming sector’s contribution to the M&E (Media & Entertainment) industry is projected to rise from 3.4% in 2019 to 12.6% by 2026.The sector’s contribution to the AVGC industry is projected to rise from 41% in 2019 to 68% by 2026.
Workforce growth in the industry has increased 20-fold from 2018 to 2023, with a 97.56% CAGR over the same period.
The female workforce within the industry has surged with a 103.15% CAGR from 2018 to 2023.
The sector has recorded a 168.06% CAGR from 2018 to 2023 in terms of annual turnover.
India’s online gaming industry has shown the highest growth rate among major gaming nations, with a CAGR of 30% from 2017 to 2023.

The report underscores the potential of India’s online gaming sector to drive economic growth and create jobs. However, it emphasizes the need for government and industry leaders to address regulatory and taxation challenges to sustain this growth. With the right policy framework, India’s online gaming sector can attract significant foreign investment and provide extensive opportunities across various aligned sectors.

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