₹2 sachet has quality check but not Indian online games: E-gaming Fed

India’s online gaming industry is facing uncertainty due to a 28% tax and state bans on skill-based games, whether legal or not, raising concerns about its future. 

Anuraag Saxena, CEO of the E-Gaming Federation, highlighted the lack of security measures in the industry. The industry body has legally challenged the higher goods and services tax and tax demands amounting to nearly ₹1.5 trillion.

“It’s surprising that in India a ₹2 sachet of ketchup has an FSSAI (Food Safety and Standards Authority of India) label, but online games don’t have any security or quality seal,” Anuraag Saxena, head of E-Gaming Federation, told Livemint.

Saxena said consumers are ending up losing lakhs on unscrupulous games with no redressal mechanism and that the country must have a whitelist for gamers to be able to distinguish which is legal and which is not.

Self-regulatory bodies have been proposed for online gaming platforms to promote ethical practices and create a stable regulatory environment. However, the government has not approved this yet.

Tax Burden:

The Ministry of Electronics and Information Technology (MeitY) plans to develop a framework for certifying online games involving monetary transactions in India, which is expected to grow by 20% until 2024-25, reaching a value of ₹23,100 crore. India has 500 million active gamers, with 200 million willing to invest in enhancing their gaming experiences.

The online gaming industry in India has raised $2.8 billion in the last five years but faced challenges due to increased tax burden, leading to layoffs and closure of startups. The skill-based gaming sector faced higher GST rates and multiple state bans, impacting its growth.

The gaming industry globally has seen outstanding growth, with over 1.2 billion players. In India, there are 500 million active gamers, and 200 million are willing to invest in enhancing their gaming experiences, according to Saxena.