Following the Indian government’s decision to impose a 28% tax on online gaming turnover, BharatPe co-founder Ashneer Grover took to Twitter to express his concerns about its potential impact on foreign investments and the broader startup ecosystem in India.
What Happened: On Tuesday, July 11, India’s Finance Minister Nirmala Sitharaman announced the imposition of a 28% tax on the turnover of online gaming companies. This decision could significantly impact the $1.5 billion (₹12,350 crore) industry.
In response, Grover tweeted that foreign investors might hesitate to invest in the country’s firms due to regulatory risk, potentially drying up funds not only for online games but across sectors and startups.
Grover also drew attention to the fact that many celebrities and sportspersons like Mahendra Singh Dhoni, Virat Kohli and Saurav Ganguly had endorsed online gaming firms like Dream11 in the past and had not been met with much public criticism.
Why It Matters: Grover’s comments highlight the potential ripple effects of the new tax regime on the broader startup ecosystem in India. The online gaming industry, which has seen a surge in popularity and significant foreign investment, could face significant challenges. Companies like Dream11 and MPL, backed by major investors like Tiger Global and Peax XV, respectively, are likely to be affected by this decision.
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As per a report, the revenue of fantasy gaming platforms during the popular Indian Premier League cricket matches rose 24% from a year earlier to over $342 million (2,800 crore) with over 61 million users participating.
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