Unlocking India’s potential: The economic, entertainment and learning power of online gaming

India’s digital landscape is undergoing a significant transformation, fuelled by the skyrocketing popularity of online interactive skill gaming. Recently, Indian storytelling through gaming has emerged as a new trend, offering a diverse array of narratives drawn from mythology, cultural heritage, folklore, history and contemporary issues.
By integrating authentic narratives and engaging gameplay, Indian storytelling in gaming not only celebrates the country’s heritage but also contributes to the creation of new jobs and economic growth in the gaming industry.What was once considered merely a pastime has evolved into a force capable of reshaping India’s economic and social dynamics. Online gaming transcends demographics and geographical boundaries, fostering vibrant communities and reflecting the evolving nature of human interaction in the digital age. It enables better access through mobile smart phones and is instrumental to bridge the digital divide. Beyond the pixels and points lies a deeper aspect of social engagement and belonging, enhancing not only the gaming experience but also mirroring the changing dynamics of human interaction in today’s society. It adds to gaining knowledge on the game aspects, cognitive skills, team building and strategizing in a fun way.
India hosts one of the largest gaming communities globally, with a remarkable surge in the popularity of online gaming marking a transformative shift in entertainment consumption patterns. However, the impact of online gaming in India extends far beyond mere entertainment. Economically, it serves as a potent catalyst for job creation and technological advancement.
Opportunities galore
The burgeoning ecosystem of game development, ranging from indie studios to larger enterprises, represents a lucrative career avenue as India solidifies its position in the global online gaming market. The job options include UI/UX designer, game developer, data engineer, 2D/3D artist and other roles. This burgeoning industry holds the key to unlocking new avenues for economic growth and leisure, generating employment opportunities for more than one lakh individuals with the prospect of expanding to 250,000 job opportunities by 2025.
Opportunities abound in various domains within the online gaming sector, including game development, e-sports management, marketing and even cyber security. This surge in employment prospects fuels innovation and propels India’s digital prowess, contributing to the growth of emerging sectors such as Fintech, cloud services, data analytics, AI and cyber security.
Moreover, the employment potential of India’s online gaming industry extends beyond urban hubs, reaching into small towns and rural areas. Aspiring game developers now have avenues to showcase their talent, leading to the emergence of small-scale game development studios in towns and rural areas, offering employment opportunities to local talent.
Culturally relevant games are emerging from these regions, reflecting the diversity and richness of India’s cultural tapestry. For instance, game development studios have emerged in places such as Goa, Manipal, Surat and elsewhere, producing games that resonate with local audiences while also appealing to global markets. This has resulted to identification of characters in social context and also penetrating gaming to hinderlands. Additionally, the industry’s demand for various IT-related roles, customer support, community management, content creation, and event management opens doors for individuals in small towns, providing them with avenues for employment and economic empowerment.
Balancing exchequer and employment interests
Promoting and supporting Indian start-ups while addressing concerns regarding the proliferation of illegal offshore gambling platforms holds the key to fostering employment growth in the sector. The government must strike a delicate balance between nurturing growth and ensuring safe gaming experiences.
Last year, the sector suffered a significant setback with the imposition of 28% GST on deposits. As a result, numerous smaller players shuttered their businesses, unicorns resorted to layoffs, investors revised growth projections downward and FDI (foreign direct investment) in India was adversely affected. These changes have set the industry back and precipitated the demise of several startups and innovative models in online gaming. The paid money for distributing to winners is not goods and services. The gaming operator should park it in separate escrow account from that of fees of developer and operating platform.
EY’s report titled ‘New Frontiers: Navigating the evolving landscape for online gaming in India’ (December 2023) also projected an abysmal CAGR of 15% till FY28. The 28% GST on deposits is the world’s most onerous regime, which could wipe out $2.5 billion of existing investments and more than 50,000 high-skilled jobs. When deciding on GST for online gaming, the GST Council said it would review the decision at the end of six months beginning 01 October 2023. It is important that when the GST Council convenes to discuss this issue, the stark realities affecting the sector post-revision of the GST rates are understood, examined and appropriate rates devised. A fine balance is required between the growth of the sector and national interest.
It is imperative for the government to recognize the legal distinctions between games of skill and games of chance and to devise taxation structures accordingly, instead of lumping games of skill and chance together for taxation purposes. Similarly a complete clarity on what is to be taxed in the GST and direct tax. Embracing this digital wave responsibly unlocks immense opportunities, especially employment opportunities. India can become a global hub for gaming excellence, attracting talent and investments while fostering a vibrant social and economic ecosystem.
All in all, India’s online gaming industry not only revolutionizes entertainment but also holds immense promise for economic growth and social development. By leveraging technology, creativity and entrepreneurial spirit, India can harness the full potential of this burgeoning sector, unlocking opportunities for all, and charting a path towards a brighter, more inclusive digital future.
Imagine a future where Indian creativity shines through innovative games, where communities thrive both virtually and physically, and where our nation takes center stage on the global digital platform. It is a win win situation for startups, employment generation, tool for learning and bridging digital divide, entertainment with need to ensure code of conduct formulated by SROs for responsible gaming and no misleading advertisements.
By: Aruna Sharma, Practitioner Development Economist and retd Sec Gol