The Indian government has made changes in its rulebook that bring online gaming activities under the direct purview of the Ministry of Electronics and Information Technology (Meity), possibly for policy-making activities.

The changes also, in a way, give formal recognition to e-sports by defining them as multi-sports events under the stewardship of the Ministry of Sports.

In a notification, issued on December 23, the government made the announcements, stating that they come into effect immediately.

The changes announced on online gaming sector were announced even as a MIB-industry task force on Animation, Visual Effects, Gaming and Comic (AVGC) sector also submitted its report last week, suggesting major tax incentives, a national and uniform AVGC policy and Create in India initiative, among other recommendations.

The notification read: “…under the heading Ministry of Electronics and Information Technology…after entry 5, the following entry shall be inserted, namely: 5A. ‘Matters relating to online gaming’.”

For the Sports Ministry, the notification said that an additional  clause has been added, defining “e-Sports as part of multi-sports events”. This means that government agencies too can organise esports tournaments.

The global gaming market was valued at $173.7 billion in 2020 and it is expected to reach  $ 314.4 billion by 2026, growing at a CAGR of 9.64 percent between 2021 and 2026, the AVGC task force said in a recently-submitted report.

The AVGC task force report, handed to the Minister of Information and Broadcasting Anurag Thakur, while quoting global reports, said that for 2021, there are 2.7 billion gamers across the world with China, Japan, US, and UK combined representing 47 percent of all gamers globally and 64 percent of all direct consumer spend on gaming.

The report said that India is expected to become one of the world’s leading markets in the gaming industry. Growing steadily for the last five years, it is expected to reach three times in value and reach $ 3.9 billion by 2025.

While recommending national policy for the AVGC sector, the report, while dwelling on the online gaming segments,  recommended that Indiancompanies should initiate conversations with global AVGC companies to offer their servers for small Indian developers for creating their own games, thereby generating revenue for the company in exchange for offering patents and protection against legal disputes.

The report also exhorted the government to set up a Game Development Fund and offer tax incentives so domestic and global companies are encouraged to get more active in India.

However, a Group of Ministers is presently studying matters relating to taxation of online games and e-sports and the GST Council is expected to take a call on the issue soon.