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Online Gaming Sector Will Touch $60 Bn Mark By 2034

US has been a significant contributor to India's gaming sector, with $1.7 bn out of the total $2.5 bn in FDI from US alone

Online Gaming Sector Will Touch $60 Bn Mark By 2034

Online Gaming Sector Will Touch $60 Bn Mark By 2034
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15 Oct 2024 8:28 AM IST

New Delhi: India's online gaming sector, currently valued at $3.1 billion, has the potential to expand to a staggering $60 billion by 2034 amid challenges surrounding regulation and taxation, a report showed on Monday.

The US has been a significant contributor to India's gaming sector, with $1.7 billion out of the total $2.5 billion in foreign direct investment (FDI) coming from the US alone.

“This reflects the immense confidence global investors have in India’s rapidly growing gaming market, which is projected to become a $60 billion opportunity by 2034,” according to Dr Mukesh Aghi, President and CEO, United States India Strategic Partnership Forum (USISPF).

Notably, 90 per cent of this FDI is in the pay-to-play segment, which also accounts for 85 per cent of the sector's overall valuation.

However, challenges surrounding regulation and taxation persist. India stands out for its high tax rate, imposing a 28 per cent Goods and Services Tax (GST) for all formats on the total deposits made by players, according to the report by USISPF and TMT Law Practice. The report also highlighted that the United Nations Central Product Classification (UN CPC), which forms the basis for taxation in domestic jurisdictions globally, defines online gaming separately from online gambling.

“With a large consumer base of over 600 million gamers, this space is rapidly being monetised and presents a substantial export opportunity. However, for Indian companies to compete on a global stage, we need a level playing field with progressive tax and regulatory policies that align with international standards,” said Aghi.

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