Budget 2025: Gaming industry expects tax incentives, infrastructure push

With the Union Budget for 2025-26 set to be presented on February 1, 2025, one key expectation is tax relief for individual to spur demand and boost consumption.

As the government prepares the Union Budget, stakeholders within the gaming industry are advocating for measures that foster growth and innovation. The Indian gaming industry is on a trajectory of significant growth, with projections indicating a market size of $9.2 billion by the fiscal year 2029. According to Lumikai, this expansion is set against the backdrop of India’s broader digital economy ambitions, aiming to reach $1 trillion by 2027-28.

Key Budget expectations include the rationalization of the GST rate, investment in digital infrastructure, and the establishment of clear regulatory frameworks to encourage both domestic and foreign investments. Such initiatives are crucial for aligning the gaming sector’s development with India’s overarching digital economy goals.

Adgully reached out to a cross-section of industry experts to gauge the general sentiment of the sector before the Budget...

Rohit Agarwal, Founder & Director, Alpha Zegus:

“For the upcoming budget, I'm actually looking forward to significant funds being allocated for the development of digital entertainment infrastructure. As an early sign, we can see the government's involvement in WAVES, a first of their moves to promote and grow the digital entertainment sector in India. Moreover, our central government, over the past year, has participated in a lot of digital content/ digital entertainment outlets to push agendas and spread the message. They realise the importance of this medium, and I am sure they would look to improve the current infrastructure to match global standards. A push in digital entertainment would have a direct impact on the esports and gaming segment, as gaming is a part of the same sector.”

Akshat Rathee, Co-founder and MD of NODWIN Gaming:

“Looking ahead to the Union Budget, we hope to see measures that accelerate the growth of India’s gaming and esports industry. Incentives for semiconductor design and manufacturing could bolster the tech ecosystem and elevate gaming hardware standards. Similarly, tax relief for middle-income groups could boost disposable income, creating opportunities for studios to develop India-centric gaming IPs.

Initiatives supporting AI skilling for rapid game deployment and quality assurance would play a pivotal role in keeping pace with global advancements, enabling faster development cycles and enhancing game quality. With the Olympic Esports Games approaching, investments in training infrastructure and coaching for esports athletes can solidify India’s position on the global stage. With the right support, gaming has the potential to drive economic growth and empower the next generation of talent in our country.”

Vishal Parekh, Chief Operating Officer, CyberPowerPC India:

“As we look forward to the Union Budget 2025-26, we are optimistic about measures that could empower India’s gaming ecosystem. With PC gaming titles now a part of the Olympic Esports Games 2025, there’s an unprecedented opportunity to position India as a global gaming powerhouse. Provisions such as reduced customs duties on gaming hardware, tax incentives to foster growth, and investments in digital infrastructure could enhance accessibility and affordability for gamers across the country. Supporting the adoption of high-performance gaming PCs would not only fuel India’s gaming culture but also boost our chances of securing medals in global esports tournaments.

We hope the government continues its progressive approach toward the AVGC and gaming sectors, fostering an environment where innovation and competitive excellence thrive, driving India’s gaming revolution forward.”

Milind D Shinde, Founder and CEO, 88 Games:

“As the Union Budget 2025-26 approaches, we are optimistic about the government’s continued focus on bolstering India’s video gaming and AVGC XR ecosystem. In 2025, we hope to see further incentives for gaming studios, particularly those developing Made-in-India games which reflect our unique culture and stories on a global stage. Enhanced investment in AVGC XR infrastructure, tax benefits for gaming startups, and support for training initiatives in gaming design and development can position India as a global hub for gaming innovation. We believe this year’s budget has the potential to create a roadmap that fosters innovation, empowers local developers, and establishes India as a leader in the global gaming industry.”

Roland Landers, CEO, All India Gaming Federation :

"In 2024, India’s online gaming industry has demonstrated remarkable resilience and growth, overcoming regulatory challenges and the impact of the 28% GST. Despite these hurdles, the sector has exceeded expectations, reaching $3.8 billion in revenue in FY24.

As we approach the Union Budget, we remain hopeful that the government will consider reducing the GST rate and addressing retrospective taxation issues, which would provide much-needed clarity and enable further growth and innovation. The government's focus on advancing the AVGC (Animation, Visual Effects, Gaming, and Comics) sector is promising, and we look forward to increased funding and policy support for this initiative.

With continued efforts, we envision a future where more Indian developers and gaming studios create world-class games and content, solidifying India's position as a global leader in gaming. Further emphasis on supporting startups and fostering innovation will be crucial to ensure the industry’s sustained growth and contribution to India's digital economy.”

Amrit Kiran Singh, President, Skill Online Games Institute (SOGI)

”The huge USD 300 bn Global Online Games Industry (4 times the size of the Movie + Music industry together) has the potential to contribute significantly, for several decades, to India's GDP growth and jobs, like IT has done. Negatives like addiction can be mitigated through use of "smart tech". The massive 1400% increase in GST in October 2023 ostensibly introduced from a moralistic perspective, has not met its objectives as it has only caused 83% of Indian player spends on Online Games to migrate from Indian platforms to "no tax" offshore (mainly Chinese) platforms. Over the past 15 months it has been impossible to block offshore platforms due to "domain farming" or get them to register and pay taxes in India. There is an urgent need to address the elephant in the room (abnormally high taxes) and correct the situation, through the "review" mechanism that the Finance Ministry had promised the industry.”