The entire Indian gaming industry is at a pivotal point now. The government of India has finally made the crucial distinction between esports and online gaming. This is a welcome move by the government as it will not only offer much-needed clarity, but it will also allow the two sectors to flourish even more.
“Under the heading “Ministry Of Electronics And Information Technology (Electroniki Aur Soochana Praudyogiki Mantralaya)”, after entry 5, the following entry shall be inserted, namely, 5A. Matters relating to online gaming,” stated the official government notification.
Union Minister of State for Electronics and IT, Rajeev Chandrasekhar stated on Twitter that the ministry will come up with rules for online gaming intermediaries. In May 2022, the Government of India created a seven-member inter-ministerial task force which was chaired by Rajeev Chandrasekhar, the Union Minister of State for Electronics and Information Technology, to identify a nodal ministry for the online gaming sector and work on its regulations.
Roland Landers, CEO, All India Gaming Federation commented on this directive by the government of India. “We welcome the appointment of MeitY as a nodal ministry for online gaming. A uniform central regulation for online skill gaming has been a long-standing demand of the industry and this step will hopefully lead to a progressive regulatory framework underpinned by consumer welfare. This will help further grow the industry and make online gaming a cornerstone of Digital India,” said Landers.
Parth Chadha, the CEO and Co-Founder of STAN had an optimistic point of view about this decision as well. “At a time when gaming and esports are emerging as the fastest growing sectors of our economy, it is heartening to see the Government of India taking note of it and taking steps to uplift these sectors with increased regulatory clarity. We at STAN welcome this move to appoint nodal Ministries for online gaming and esports both,” added Chadha.
“Recognising the sector as a ‘Sunrise Sector’ and the initiative of setting up animation, visual effects, gaming and comic (AVGC) task force for the promotion of the sector got the right actionable direction from the Government to ready the sector to contribute to the global demands,” said Saumya Sigh Rathore, Co-Founder, WinZO games.
Rathore added that a more predictable environment would attract increased investments, creating jobs and a new generation of the export industry from India. The sector, however, awaits GST clarity which stands as the biggest survival threat for the entire sector. The sector has over 1000 companies that are less than 24 months old and in the early revenue stages. We are hoping the government would continue to encourage companies to invest in technology and IP creation and consider the survival of the sector by retaining 18% GST on the commission – the only sustainable taxable model,” stated Rathore.
While this decision will surely smoothen the playfield for the online gaming segment, it is important to closely monitor the next few months to get a comprehensive understanding of how this decision will actually impact the online gaming landscape in the country.