Aditya ChaudhuriUnion finance minister Nirmala Sitharaman on February 1, 2023, presented the final full-fledged budget of the second term of the Prime Minister Narendra Modi government.
Key highlights from the Budget with regards to the gaming and esports industry include:
- Mobile phone production in India increased from 5.8 crore units, valued at ?18,900 crore in 2014-15, to 31 crore units, valued at ?2,75,000 crore, in the last financial year.
- 100 labs for developing apps using 5G services will be set up in engineering institutions.
- Removing minimum threshold of ?10,000 for TDS on online gaming and providing clarity on taxability.
With the Union Budget 2023 out, the esports and gaming industries have revealed their reactions to it, which are stated below.
Rohit N Jagasia, Founder and CEO of Revenant Esports, commented:
“Even though the Budget announcement didn’t specifically bring out the matters of concern related to AVGC sector or the esports segment to be precise, we are glad that attention is given to bring in development that would positively impact our sector. The increased mobile phone production in India will directly impact the growing interest in mobile gaming. India is a growing market for mobile gamers which will shape the Indian esports sector. Affordable mobile devices and the increasing accessibility of gaming platforms have also contributed to the growing popularity of esports in India. This is expected to further drive the growth of the Indian esports industry in the coming years.
“We are also looking forward to the progress of 100 labs for apps development using 5G services that will be set up in engineering institutions. Hopefully this could be the beginning of the 5G era in India. The announcement of removing the minimum threshold of ?10,000 for TDS on online gaming and providing clarity on taxability is a big step forward, however most esports games, like ours, don’t have any money withdrawing system so these are applicable for the online gaming sectors which are into Real Money Gaming.“
Rishabh Bhansali, Co-Founder of FanClash, said:
“The enormous upsurge in mobile phone production has been the impetus for the boom of the Esports industry in India. Pocket friendly smartphones have taken gaming and fantasy Esports to every corner of the country and a further decrease in its prices as the government proposes to reduce customs duty on import of certain inputs for mobile phone manufacturing will boost the sector’s growth like never before.
“We are extremely delighted with the propositions made in today’s budget and looking forward to the golden days that are in store for fantasy Esports and gaming in the country.“
Animesh Agarwal, Founder & CEO, 8bit Creatives, said:
“The expansion of India’s gaming business mirrors and contributes to the growth of the mobile phone industry. The number of mobile gamers in India is projected to increase to 650 million by 2025, according to the most recent report from the Internet and Mobile Association of India (IAMAI).
“The previous seven to eight years have been instrumental to the relationship of mobiles and gaming in India, with numerous mobile gaming titles being released and gaining popularity among the Indian gaming community. Developer dedication to expanding mobile gaming in India and the advent of different employment opportunities through mobile gaming have all contributed to an increase in the number of Indians adopting mobile gaming. This has also contributed to the growth of the mobile device sector, as professional gamers frequently seek to upgrade their devices as they progress in their career. Even casual gamers seek better devices in their gaming journey. Interdependence of the industries is also reflected in the commitment of the mobile device companies towards strengthening their presence in the gaming community through dedicated efforts and investments.
“From launching gaming-specific devices such as One Plus Nord, ASUS ROG gaming phones, etc., to hosting multiple events and tournaments for the community, to working with gamers to build a community of mobile gamers, etc., mobile device giants such as One Plus, ASUS, Samsung, etc. are also investing heavily in the gaming industry in India. Indian Gaming has the potential to provide a significant boost to the electronics industry as a whole, spanning consoles, PCs, VR gadgets, mobile devices, wearables, IT accessories, and so on. It will be fascinating to observe the next growth surge of gaming in India and how it contributes to and parallels the rise of the electronics industry.“
Lokesh Suji, Director of the Esports Federation of India and Vice President of the Asian Esports Federation, added:
“As stated by our honourable finance minister Nirmala Sitaraman in today’s Budget, mobile phone production in India has seen a significant rise in the past few years and that has undoubtedly been a game-changer for the Esports industry in the country. Contributing extensively to propelling the industry to unimaginable heights, the increasing availability of smartphones in India at affordable rates has not only expanded the player base by making gaming more accessible but has also attracted investment from companies, resulting in the development of existing as well as newer games.
“With the numbers further upscaling and 5G acting as a catalyst that fuels the industry’s flourishment, we are going to witness monumental growth within the Esports sector in the coming years. As we are still awaiting clarity on the taxability for Esports, we are hopeful that the decisions will be in favour of the community and impact it positively.“
Rohit Agarwal, Founder & Director, Alpha Zegus, a next-gen marketing agency specialising in the domains of gaming and lifestyle, said:
“An increase in smartphone production in our country will bring down smartphone costs drastically – that’s a big win for the gaming industry! More advanced smartphone tech will be available at accessible pricing, which means gaming will eventually no longer be restricted by hardware capabilities. Really looking forward to this being massively adopted.
“Modifications to the TDS limit will impact the Real Money Gaming industry more than the Esports industry. Since esports games majorly do not have a system of ‘money withdrawal’, TDS does not impact them. As for the RMG industry, the removal of TDS threshold is a bit debatable. Most forms of income in India are considered under the Rs.10000 TDS threshold. If we consider ‘winnings’ as ‘income’, then the threshold should remain the same.“
Ankur Singh, CEO and Founder, Witzeal Technologies, said:
“We are thrilled with the announcement of the first budget of Amrit Kaal that envisions an empowered and inclusive economy driven on the fundamentals of technology and knowledge. India is now the third largest ecosystem for start-ups globally and ranks second in innovation quality for middle-income countries. Fostering the development of start-ups in the online gaming industry, the initiative of ‘Make AI in India, make AI work in India’ will potentially boost the growth of gaming studios.
“The Hon’ble Finance Minister particularly mentioned clarifying the taxability relating to online gaming. Now as the Indian gaming market is expected to grow at a 27% CAGR reaching US$8.6 billion by 2027, government support will further help to streamline the industry and provide structured growth to this burgeoning industry.“
Roland Landers, CEO, All India Gaming Federation, added:
“The online gaming industry welcomes the budget announcement by the Hon’ble Finance Minister, particularly in relation to the rationalisation of direct taxation for online gaming. We are happy to note that the Finance Bill carves out the distinction between betting and gambling activities and online games, through introducing a new section 194BA which taxes a user’s net winnings from online games at the end of the financial year. While we await CBDT’s clarifications and guidelines in this regard, we are hopeful that the certainty in taxation offered by the budget announcement will be a huge stimulus for the growth of the online gaming industry.“
