India’s online gaming arena is witnessing exponential expansion and is forecasted to climb from $3.7 billion in 2024 to a staggering $9.1 billion by 2029, as per research by Winzo Games in collaboration with the Interactive Entertainment and Innovation Council (IEIC). This represents an impressive annual compounded growth rate of 19.6%, driven by a user surge from 600 million to nearly 952 million. If regulatory frameworks become more supportive, the sector could potentially balloon to $60 billion by 2034, positioning India as a dominant force in the $300 billion global gaming market.
However, the ecosystem is grappling with a major hurdle — ambiguous taxation policies, especially regarding the Goods and Services Tax (GST). Previously, companies paid 18% GST on service charges. Now, a July 2023 GST Council decision has placed both skill and chance-based games under a 28% tax bracket, applied to the entire entry fee, not just earnings.
This has sparked legal backlash and uncertainty. For example, First Games Technology, Paytm’s gaming division, has received a Rs 5,712 crore notice for backdated GST dues, interest, and penalties covering 2018–2023. The firm intends to legally contest the retroactive imposition of the updated GST policy.
The sector has also experienced a severe decline in funding, with foreign investments plummeting from $1.74 billion in 2021 to a mere $15 million in 2024. Experts warn that unless fiscal clarity is restored, the industry’s explosive growth could stall.
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