CXOToday has engaged in an exclusive interview with Dr. Aruna Sharma Practitioner Development Economist & Retd Secretary GoI
1. In what ways is the online gaming industry making a substantial contribution to the economic growth in India?
The popularity of online gaming as a form of entertainment in India has surged with the widespread availability of inexpensive smartphones and affordable internet access.
Global investors, developers, and other industry stakeholders are keenly watching the growth story of the Indian online gaming industry which has witnessed a 28% CAGR between FY20-23 and holds a market valuation of ₹16,428 crores.
However, instead of a direct contribution in the economic growth story of India the online gaming industry is contributing in terms of increasing revenue (direct and indirect tax) collection (year-on-year). Additionally, the sector has attracted budding tech developers and entrepreneurs by providing them employment opportunities and fueling innovation to keep up with the rising demand for AI and other such immersive gaming experiences.
2. How is the online gaming sector prospering through innovation and technology?
Gaming sector is all innovation in terms of graduating from just entertainment to that of iGaming also being introduced for simulation for testing, honing skills, cognitive improvements, while becoming a learning tool in education. There are many products of iGaming used for this purpose.
Technology and use of AI is constantly increasing with the spread of smartphones and a rising demand for immersive and advanced technology tools.
3.Delve into the necessity for a regulatory framework that is both balanced and adaptable.
Unregulated framework where user base is large leads to spread of iGaming in gray market with all its vices. By regulating the iGaming industry, the government can unlock other positive outcomes, such as increased tax revenues, economic growth via attracting more foreign investment, job creation, and
better consumer protection. A thorough regulatory framework will enable transparent parameters to
distinguish and license the game of skill accordingly and rest will fall under game of chance.
Regulations always bring in transparency and ensure there is no misleading advertising or non-payment of legal taxes. Additionally, regulations such as the IT Amendment Rules, 2023 have ascertained a robust grievance redressal mechanism by setting up of the SRBs and SROs.
Further a balanced and stable regulatory framework could provide assurance and confidence to the international iGaming companies in paying taxes while doing business in a regulated and transparent market, create jobs, and invest in the country and its people. Thus, comprehensive regulations, that are conducive to doing business and protect the Indian players, who are being abused by countless nefarious parties. are necessary in the current iGaming landscape.
Consequentially, foreign iGaming companies operating legally have consistently demanded that the Indian government establish an adequate and stable regulation and taxation regime. Instead, the government has consistently chosen to unwisely prohibit it, thus pushing this whole industry underground.
4. Highlight the inclusive characteristics of the online gaming industry.
Inclusiveness can be seen in terms of bridging the digital divide with easy access to smartphones that make up 60% of the phone population. Non-money games are the first introduction to children to build up cognitive skills and can further be upgraded as a better learning tool for complex subjects like mathematics, language learning, understanding scientific phenomena etc.
With the introduction of digital payments while dealing with real money games (RMG), the government is able to better control and track the transactions bringing in transparency and restricting the mushrooming of the grey market.
Additionally, due to absence of systemic market regulations and destructive tax policies, international iGaming companies have shun India, sending an unwelcoming signal to many other potential foreign investors. Furthermore, external iGaming companies have faced unfair persecution and baseless lawsuits from India. Thus, in such a scenario an inclusive framework for external iGaming companies could provide them with a conducive environment and willingness to invest in the Indian gaming industry.
To address the social concerns, iGaming platforms have leveraged and used filters for age restrictions, monetary capping and hours spent while indulging in online gaming to ensure it doesn’t become addictive. Thereby, a record with the digital platforms for identifying players showing signs of addiction or overspending can be attended to and ensure through these filters a responsive gaming behaviour.
5.What are the dynamic aspects of the gaming industry, considering its ongoing evolution and the emergence of new trends
iGaming needs to place itself as not just a tool for entertainment but also to bring about teaching of civic sense, education tools and thus contribute to the learning including the fun aspects. The future of the gaming industry holds promise of growth, however, responsible gaming and iGaming go hand in hand as tools for better learning and honing up of skills as well.
