India’s digital landscape is undergoing a major transformation with the surge in popularity of online interactive games of skill. Recently, an emerging trend has emerged of Indian storytelling through games, offering diverse stories drawn from mythology, cultural heritage, folklore, history and contemporary issues.
Blending authentic narratives with engaging gameplay, storytelling in Indian games not only celebrates the country’s heritage but also contributes to new job creation and economic growth in the gaming industry. What was once considered merely entertainment has evolved into a force that can reshape the economic and social dynamics of India. Online gaming transcends demographic and geographical boundaries, fosters vibrant communities and reflects the evolving nature of human interaction in the digital age. It improves accessibility through mobile smartphones and helps bridge the digital divide. Beyond the pixels and points lies a deeper dimension of social engagement and belonging that not only enhances the gaming experience but also reflects the changing dynamics of human interaction in today’s society. You can have fun while gaining knowledge about gaming aspects, cognitive skills, team building and strategy planning.
India is home to one of the largest gaming communities in the world, and the surge in popularity of online gaming is bringing about a dramatic change in entertainment consumption patterns. However, the impact of online gaming in India goes beyond just entertainment. Economically, it acts as a powerful catalyst for job creation and technological advancement.
Opportunities abound
From indie studios to large corporations, the burgeoning game development ecosystem presents lucrative career avenues as India cements its position in the global online gaming market. Job options include UI/UX designers, game developers, data engineers, 2D/3D artists and more. This fast-growing industry holds the key to unlocking new avenues of economic growth and leisure, creating over 100,000 job opportunities and projected to scale to 250,000 by 2025.
Expanding
The online gaming sector is rich with opportunities across a range of fields including game development, e-sports management, marketing and even cybersecurity. The surging job outlook is stimulating innovation, boosting India’s digital prowess and contributing to the growth of emerging sectors such as fintech, cloud services, data analytics, AI and cybersecurity.
Moreover, employment potential in India’s online gaming industry is expanding beyond urban areas to smaller towns and rural areas. Aspiring game developers are being given an avenue to showcase their talent, with small game development studios springing up in towns and rural areas, providing employment opportunities for local talent.
These regions are giving birth to culturally relevant games that reflect the diversity and richness of India’s cultural tapestry. For instance, game development studios have sprung up in places like Goa, Manipal and Surat, creating games that resonate with local audiences while also appealing to global markets. This has helped identify characters with a social context and penetrate games to marginalized regions. Additionally, the industry’s demand for IT jobs, customer support, community management, content creation, event management, etc. is opening doors for people from small towns, paving the way for employment and economic independence.
Balancing public finances and employment interests
Promoting and supporting Indian start-ups, while addressing concerns about the proliferation of illegal offshore gambling platforms, will be key to driving job growth in the sector. Governments must strike a delicate balance between fostering growth and ensuring a safe gambling experience.
Last year, the sector was hit hard by the imposition of 28% GST on deposits. As a result, many small businesses closed operations, unicorns resorted to layoffs, investors revised down their growth forecasts, and FDI (foreign direct investment) into India was adversely affected. These changes set the industry back and hastened the demise of several online gaming startups and innovative models. The money paid to distribute to winners is not a product or service. Game operators should deposit it in an escrow account separate from developer and operating platform fees.
EY’s report titled “New Frontiers: Navigating the evolving landscape of online gaming in India” (December 2023) also predicts a dismal CAGR of 15% through FY28. The 28% GST on deposits is the most onerous regime in the world, which could result in loss of $2.5 billion in existing investments and over 50,000 highly skilled jobs. In deciding on GST on online gaming, the GST Council said it would review the decision in six months from October 1, 2023. When the GST Council convenes to discuss the issue, it will be important to understand and consider the harsh realities that will affect the industry after the revision of GST rates and devise an appropriate tax rate. A delicate balance will have to be struck between the growth of the industry and national interest.
It is imperative that governments recognise the legal distinction between games of skill and games of chance and devise tax structures accordingly, rather than lumping them together for taxation purposes. Similarly, there needs to be complete clarity on what is taxable under GST and direct taxes. Embracing this digital wave responsibly will create vast opportunities, especially employment opportunities. India can become a global hub for gaming excellence while attracting talent and investments and nurturing a vibrant social and economic ecosystem.
Overall, India’s online gaming industry is not only revolutionizing entertainment but also holds huge potential for economic growth and social development. By leveraging technology, creativity and entrepreneurial spirit, India can harness the full potential of this fast-growing industry, unlocking opportunities for all and paving the way for a brighter, more inclusive digital future.
Imagine a future where Indian creativity shines through innovative games, communities thrive virtually and physically, and India plays a central role on global digital platforms – it’s a win-win situation for startups, job creation, a tool for learning and bridging the digital divide, and entertainment that needs to ensure responsible gaming and a code of conduct laid out by the SRO that is free of misleading advertising.
Author: Aruna Sharma, Practicing Development Economist and Former Secretary of State
