Government to allow 100% FDI for online gaming?

The Indian government may soon introduce new policies for Foreign Direct Investment (FDI) in the online gaming sector. Reports suggest that the government is considering allowing up to 100 percent FDI in this sector. This potential move could provide significant relief to the industry, which is currently facing high tax burdens and regulatory uncertainties.

Discussions are ongoing at various levels of the government regarding a proposal from the Department for Promotion of Industry and Internal Trade (DPIIT), according to a report by Mint, citing sources. The proposed policy would allow full FDI in online real-money gaming, provided that the investments do not involve betting or gambling activities.

"The goal is to simplify the process and support the high-growth gaming sector," an official told Mint. "By clarifying the FDI rules and allowing up to 100 percent investment through the automatic route, we aim to facilitate capital influx into this burgeoning industry."

While 100 percent FDI in online gaming is not explicitly prohibited, existing regulatory ambiguities have made it difficult for companies to secure banking and government clearances, thus deterring potential investors. However, it is not yet clear if this pertains to only Real Money Gaming players or other stakeholders which includes casual gaming industry players, video game developers, etc.

This proposal aligns with the government's broader strategy to liberalize FDI regulations across various sectors.

In the Union Budget presented on July 23, the government pledged to simplify FDI rules and encourage foreign investments, including promoting the use of the rupee in international transactions.