Home
News
India considers 100% FDI in online gaming to boost industry growth

India considers 100% FDI in online gaming to boost industry growth

The Indian government is considering a significant policy shift that could allow 100% Foreign Direct Investment (FDI) in the online real-money gaming (RMG) sector without requiring prior official approval. According to a report by Mint, this proposal aims to alleviate the financial pressures faced by the industry, which has been adversely affected by a 28% Goods and Services Tax (GST) imposed in recent months.

An anonymous official informed Mint that the initiative is designed to simplify the process for Indian startups seeking foreign capital in a rapidly growing sector. The current regulatory environment has created ambiguity regarding FDI under the automatic route, which the new regulations aim to clarify. By permitting full investment through this route, the government hopes to attract more capital into the industry.

While 100% FDI is technically permissible under existing regulations, the complexities involved in obtaining necessary approvals have deterred potential investors. The proposed changes would streamline this process, allowing investments up to the value of the entire business without prior government consent.

Discussions about this measure are taking place at multiple government levels, with the commerce ministry reportedly considering an approach that would specifically exclude luck-based games from this framework. Historically, India has primarily legalized skill-based games, such as rummy and poker, while many other forms of gaming have operated in a grey market.

The proposed policy could revitalize the RMG sector, which generates substantial revenue from skill-based games but has faced challenges regarding the classification of these games.

Published August 8, 2024 by GamblingTalk