MeitY appointed as nodal agency for online gaming sector in India

Ministry of Electronics and Information Technology (MeitY) on Tuesday was appointed as the nodal agency for online gaming in India. This ultimately means that MeitY will now be in charge of making rules related to the online gaming industry in the country.

In addition to this, the Ministry of Youth Affairs and Sports has been appointed as in charge of e-sports. Droupadi Murmu, President of India, has made amendments to the Allocation of Business Rules to make these changes. The move is aimed to bring more clarity and uniformity to the country’s online gaming sector.

Minister of State for Information Technology Rajeev Chandrasekhar, had revealed that MEITY will soon release rules for online gaming intermediaries and will also start public consultation post-releasing rules. He said, “Government is committed to encouraging tech innovation, also need to ensure no illegal content, services are made available.”

The Centre’s this move comes at a time when the country’s gaming sector is witnessing heavy growth - both in downloads and revenue. According to a report by Lumikai, a gaming and interactive media venture fund, the Indian gaming sector saw its revenue jump from $2 billion in FY21 to $2.6 billion in FY22. Moreover, the report also suggests the domestic gaming sector grow at a 27 percent compound annual growth rate (CAGR) to $8.6 billion by FY27.

The Centre, which had been working on formulating rules for the sector for a while, on December 26, notified these changes in line with a recommendation made by an inter-ministerial task force in its report. A seven-member inter-ministerial task force was set up under Rajeev Chandrasekhar to select a nodal agency for the sector in May.

"With the identification of a nodal ministry for both online gaming and e-sports, the first step towards identification and centralisation of powers has been achieved, one can hope that this will of course transcend into some uniformity in regulations across states for gamers as well as gaming companies," said Shivani Jha, gaming and tech lawyer and the director of EWA Centre.

Online gaming includes games such as Candy Crush, Teen Patti and fantasy sports among others. However, it should be noted that the task force doesn’t consider games of chance, like online betting or gambling, within online gaming.

Recently, the Indian online gaming industry has been under fire, largely due to the reports of gross and service taxes (GST) evasion, cryptocurrency fraud real-money gaming and the fear of gambling within the sector. Moreover, many skill-based real money games, which account for over half of the industry's revenue, have come under the radar of several state governments. States like Tamil Nadu, Karnataka, Telangana, Andhra Pradesh and Kerala have either banned or tried to ban such games as gambling falls under state jurisdiction.