Animation, gaming sector gets booster shot; may see more job creation

The government's budget proposal to set up a task force to promote the Animation, Visual effects, Gaming and Comics (AVGC) sector of India has come as shot in the arm for the industry that has been urging the government for tax reliefs, relaxation in regulations, and facilitation of both domestic and international fundraising for companies in this space.

The AVGC industry in India has been witnessing steady growth recently, thanks to an increasing gaming industry in India, as well as the demand for homegrown shows on over-the-top (OTT) video streaming platforms. A November 2021 report by the India Brand Equity Foundation stated that in 2020, the Indian media and entertainment industry was worth $18.64 billion, in which online gaming and visual effects were worth $1.11 billion and $745.6 million respectively.

These figures were projected to rise to $29.81 billion by 2023, in which online gaming and visual effects are projected to be worth $2.09 billion and $1.79 billion respectively. Gaming and visual effects sectors, therefore, were projected to outpace the average growth in the media industry.

The proposed task force, according to finance minister Nirmala Sitharaman, would also look to realise an “immense potential to employ youth”.

India is already home to numerous game and visual effects studios, both local and international, such as Ubisoft, Jetsynthesis, Prime Focus and Prana Studios. The proposed AVGC task force may help incentivize more individuals to pursue careers in these sectors, which have until now been largely seen as niche, and even frivolous, opine experts.

The AVGC task force "will help India achieve its potential of generating 20 lakh jobs, according to our projections. These are critical skills for the growth of the metaverse – and India is poised to take advantage of this ecosystem,” said Jehil Thakkar, partner at Deloitte India.

Sai Srinivas, chief executive of mobile gaming and esports startup Mobile Premier League, believes the AVGC task force can help develop “deep tech intellectual property”, to build services that would be exported to the rest of the world. However, he also said, “A progressive tax regime, predictable regulatory framework and supportive funding policies will allow the industry to compete on the world stage. It will also help develop a workforce of young and employable AVGC professionals.”

Pranay Agarwal, head of compositing for India at visual effects and animation studio DNEG, concurred. “The government will need to focus big time on tax exemptions, and setting rules for the workings of this industry,” Agarwal said.

To be sure, this is not the first time that the government has taken notice of the sector. In November 2021, Apurva Chandra, secretary, Ministry of Information and Broadcasting, had announced at the Confederation of Indian Industry (CII)’s Big Picture Summit that the central government is working towards the setting up of a National Centre of Excellence (CoE) for AVGC.

In January 2022, the Karnataka state government became the first in India to set-up an AVGC CoE. During its unveiling, C.N. Ashwath Narayan, the minister of science and technology of the state, had stated that India presently has a 10 percent market share in the global AVGC industry, with the potential to capture 25 percent of the world’s AVGC market by 2027.