Online Gaming Industry to Play a Key Role in Driving Economy by 2025-26

Recreational games like rummy and ludo have been a small footnote in the Indian economy, limited to the card deck and ludo boards sold. However, the digital transformation in India has led to the birth of many new industries and rejuvenated a few existing ones too. It may have been hard to imagine two or three decades ago, but gaming is now a well-recognised component of the country’s economy.

As categories like fantasy games, ludo, and rummy rules the gaming landscape, the industry continues to grow rapidly across the country. Now, as India draws sight at $7 trillion by 2030, vibrant industries like gaming are expected to play a key role.

The Ripple Effect

The prominence of the gaming industry is part of a larger ripple effect sweeping the Indian economy. Apart from gaming, other industries, such as new media, healthcare, manufacturing and automobiles, are stimulating the demand for innovations in the electronics industry. There is an increased supply of processors, devices and internet access to meet these demands. As a result, the electronics industry as a whole is poised to grow to $300 billion by next year.

Online gaming is one of the several key accelerants in the growth of the electronics industry and, by extension, the Indian economy as well. The gaming industry is adopting rapid development cycles and innovative organisational models and making the most of the latest technological advancements. Studies have observed that gaming technologies like game engines, augmented reality, virtual reality, rendering software, and haptic feedback are now being adopted by various other industries.

Technological innovations in gaming are now revolutionising the processes in industries as diverse as energy, IT and manufacturing. Apart from the influence, the sheer size of the Indian games industry is fuelling the growth of other industries.

Driving With Volume

The Indian games industry is proving to be a constant benefactor for the fintech sector in the country. One leading gaming platform alone accounts for more than 4 billion microtransactions every month. This represents one in every 30 UPI transactions in the country. Additionally, 20% of its gamers make their first digital payment through the platform. This indicates how influential gaming has become for the fintech growth in the country.

Rummy rules pioneers like RummyPrime have created a synergy with fintechs to develop an ecosystem that is beneficial for both industries. The growing volume of the gaming industry is critical in this regard. The Indian gaming industry is now the second largest in the world, behind China in terms of user base. If India reaches the 720 million users mark by 2028, it will become the largest gaming industry in the world.

Even in terms of revenue, India is expected to be an influential country in the global gaming industry. Its revenue of ₹33,000 crores in 2023 is expected to double by 2028. This signifies an impressive CAGR of around 14.5%.  A major force in the Indian games industry is the real money games sector, which includes fantasy games, rummy, poker, etc. It generated ₹16,500 crores in 2023. Despite the setback of a higher tax rate, the sector continues to grow at a CAGR of 10%. Talking of tax contribution, between 2025 and 2029, the real money gaming sector is estimated to contribute more than ₹86,000 crores to the exchequer through TDS and GST.

The contribution of the online games industry can also be seen in the employment generation. The industry is expected to employ 2-3 lakh people in India through direct and indirect job opportunities in the coming years. This is a positive signal for the Indian economy in general. The gaming industry has also attracted massive investments from domestic as well as overseas investors. In the past five years, the industry has ushered in more than ₹23,000 crores in investments.

The Next Big Push

For all the successes the Indian games industry has achieved over the years, a few crucial steps can make it even more influential for the country’s economy.

Regulatory amendments and tax reforms are expected to increase the flow of FDI in gaming even further in the coming years. Presently, the industry doesn’t have a centralised regulatory framework in place. Industry experts also believe a common standard is needed to define responsible gaming, promote transparency and fairness, and provide a safe gaming ecosystem. Besides, there is a need to implement a framework that protects gamers from unscrupulous elements. Steps like these will streamline the industry’s growth even further. In recent years, the government has shown keenness to optimise the scope of the industry and work with the major players to unlock its full potential.

The government is also investing in the AVGC area to build a talent pool that is future-ready. This will solidify India’s position as a global gaming powerhouse, not only in terms of user base but also in gaming development and production. It will also ensure that the Indian games industry continues to have a sustainable impact on the economy in and beyond 2025-26.