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India’s Online Gaming Industry: Potential and Challenges

GS-3 Mains : Economy

Revision Notes

Question : Examine the regulatory landscape governing online gaming in India, focusing on the absence of a uniform federal law and the implications of existing legislation such as the Public Gambling Act (1867).


  • Prime Minister’s focus on making India a global gaming hub.

Industry Status:

  • Largest mobile gaming markets globally (homegrown startups).
  • 27% CAGR growth.
  • $3.1 billion revenue in FY23.
  • Potential to add $300 billion to GDP by 2026-27 (AI + gaming).


  • Significant investments (domestic & foreign).
  • Job creation (direct & indirect).
  • Leverages India’s IT expertise.
  • Only 1.1% of global online gaming revenue – huge room for growth.

Government Initiatives:

  • Digital Gaming Research Initiative: Supports research & development in gaming.
    • Focuses on learning/leisure platforms, immersive Indian-themed games, and collaborative design processes.
  • AVGC Promotion Task Force: Promotes Animation, Visual Effects, Gaming, and Comics sectors.
    • Aims to leverage “Make in India” and “Brand India” initiatives.

Regulation Challenges:

  • No uniform federal law for skill-based gaming.
  • Public Gambling Act (1867) and Prize Competitions Act (1955) partially govern online gaming (with state variations).
  • Lack of clarity creates uncertainty for businesses.
  • Recent appointment of MeitY as the nodal ministry provides legitimacy.
  • Upcoming regulations for online gaming intermediaries and public consultations expected.

Other Challenges:

  • Potential for addiction, mental health issues, and financial frauds.
  • Growth of illegal offshore gambling markets.
  • Difficulty differentiating between legitimate and illegal platforms.
  • Lack of dedicated regulatory authority weakens enforcement.
  • 28% GST on online gaming (increased from 18%) raises sustainability concerns and may impact job creation.

Way Forward:

  • Leverage rich cultural heritage (stories, legends, folklore) for game development.
  • Foster an enabling environment for skill-based gaming.
  • Promote diversity and inclusion within the industry.
  • Capitalize on India’s IT talent pool for innovation.
  • By addressing these aspects, India can become a $1 trillion digital economy and a major player in the global gaming industry.

Source : https://www.thehindu.com/opinion/op-ed/getting-to-a-new-level-in-indias-online-gaming-sector/article68146583.ece


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