India is rapidly emerging as a global powerhouse in digital gaming, with 590 million gamers and a market projected to reach ?66,000 crore ($7.63 billion) growing at a compound annual growth rate (CAGR) of 14.5 percent. This growth far exceeds the global average of 8 percent CAGR, positioning India as one of the fastest-growing gaming markets in the world.
Mobile gaming powers growth
Mobile gaming continues to dominate the Indian landscape, making the country the second-largest market globally by game downloads. A recent report by gaming venture capital firm Lumikai reveals that India added 23 million new gamers in FY24. Weekly gaming time has surged by 30 percent, now averaging 13 hoursoutpacing the time spent on social media.
This shift indicates a growing user engagement and a stronger monetisation pipeline. In fact, 56 percent of gamers who pay make their first in-game purchase within a week of downloading a game, highlighting a clear trend of delayed but decisive spending habits.
Expanding user base beyond metros
Indias gaming population is becoming more diverse and decentralised. The Lumikai report shows that 66 percent of gamers now come from non-metro cities. The number of women gamers has also risen to 44 percent in FY24, up from 41 percent the previous year.
Users in southern India are spending 1.6 times more time on interactive digital platforms like OTT, Instagram, and music services compared to other regions. Additionally, 77 percent of users in the South pay for such services, in contrast to 51 percent in the North. Meanwhile, the western region shows the highest willingness to pay for games.
Strong investment backing
Indias gaming ecosystem is attracting significant funding. The , positioning gaming as a critical pillar of the digital economy. The move from passive media consumption to participatory, creator-led platforms is also helping the industry tap into new revenue models.
According to iGaming expert George John, the legal framework still varies across gaming types. He told SiGMA News, Indias iGaming industry is booming, but not all gaming models are treated equally under the law. If youre in the industry, understanding this distinction is crucial for compliance and long-term success.
Industry set to hit ?316 billion
A new report by Ernst & Young (EY), titled A Studio Called India, forecasts that Indias online gaming segment will reach ?316 billion (US$3.7 billion) by 2027, growing at a CAGR of 10.8 percent. The growth is fuelled by Indias mobile-first user base, annual addition of 15 million smartphones, and some of the worlds lowest data tariffs.
In an exclusive conversation with SiGMA News, Ashish Pherwani, Leader of the Media & Entertainment Sector at EY India, explained that this growth is driven by factors such as rising per-capita GDP, the annual addition of approximately 15 million smartphones, and a young, predominantly mobile-first population, supported by one the worlds lowest data charges.
Tax pressure slows real-money gaming
The Indian online gaming segment earned ?232 billion ($2.72 billion) in 2024, with 77 percent of this revenue coming from transaction-based games, according to the EY report.
Transaction-based gaming, despite being the largest sub-segment, is expected to grow slowly due to recent regulatory changes. The new 28 percent Goods and Services Tax (GST) on gross deposits, effective from 1 October 2023, has pressured operating margins. Additionally, uncertainty over past GST liabilities of over $13 billion is affecting fresh investments. The outcome of ongoing litigations will be crucial for the industrys future.
Talking about will retrospective GST liabilities could affect foreign investment, platform exits, or market consolidation Pherwani said, Until the retrospective GST matter is fully resolved, there will naturally be a pause in foreign investment into Indias real money gaming sector. But we expect investments into casual gaming and esports to be significant.
