Can Budget 2026 fix tax uncertainty plaguing online gaming firms?
What's the story
The gaming and esports industry is looking forward to a mention in the upcoming Budget 2026. This comes after Prime Minister Narendra Modi's recent endorsement of Indian epics Ramayan and Mahabharat as potential themes for global gaming. The endorsement has given a major boost to the industry, with stakeholders now hoping for more than just a mention - they want real policy action for gaming and esports.
Regulatory changes
Online gaming law and its implications
The Promotion and Regulation of Online Gaming Act has banned real-money games but clarified the distinction between competitive esports and betting-led gaming. Animesh Agarwal, co-founder and CEO of S8UL Esports, said a formal acknowledgment from the government would be an important signal for this ecosystem. While the new law provides broad principles, stakeholders still seek clarity on tax frameworks across mobile, PC, and console gaming.
Industry hurdles
Esports recognition and banking challenges
Akshat Rathee, co-founder and MD of NODWIN Gaming, has called for esports to be recognized as a sport. He argued that prize winnings should be treated on par with other sporting disciplines, not taxed under gambling or speculative income frameworks. Beyond taxation, he also emphasized the need to change how financial institutions view gaming businesses as high-risk entities.
Funding clarity
AVGC-XR funds and industry expectations
Despite PM Modi's emphasis on gaming and India's potential in the sector, budget mentions have been sparse. The 2022 Budget announced the Animation, Visual Effects, Gaming, and Comics (AVGC) Promotion Task Force but clarity on fund allocation and implementation frameworks is still evolving. Rohit Agarwal, founder & director of Alpha Zegus, expects the Budget to provide visibility on AVGC-XR funds amid policy momentum such as National Centre of Excellence (NCoE) for AVGC-XR approved in 2024.
Institutional development
IICT's role in strengthening AVGC ecosystem
Rajan Navani, chairman of JetSynthesys and CII India@100 Council, highlighted the operationalization of NCoE for AVGC-XR as the Indian Institute of Creative Technologies (IICT). He said with an allocation of ₹391.15 crore, IICT is being developed on the lines of IITs and IIMs for creative technologies like AVGC-XR. Further capital infusion into such initiatives and more IICTs across India will strengthen the AVGC ecosystem.