Tiger Global, Peak XV, and Steadview Capital, along with 27 other investors, have collectively appealed to Indian Prime Minister Narendra Modi to reconsider a 28 percent gaming tax. Their contention is that this tax would have a negative impact on potential investments totaling $4 billion (approximately Rs. 32,811 crore). The investors, in a letter obtained by Reuters, expressed concern about the tax decision’s repercussions and its potential to undermine investor confidence in the Indian tech ecosystem.
The gaming sector in India has seen a surge in popularity, particularly with online games like fantasy cricket. However, concerns have also emerged regarding addiction among players. In response, the Indian government recently introduced a tax on the funds collected by online gaming companies from their customers.
The letter highlights the adverse effects of the tax proposal, stating that it will hinder the growth of the gaming sector in India and impede prospective investments worth at least $4 billion over the next 3-4 years. This marks the first instance of direct lobbying by investors against the imposition of the tax.
Despite the industry’s pleas, the Indian government has categorized online gaming platforms as a “social evil,” with several ministers on the government tax panel sharing this view. As a result, the gaming industry has not been involved in further consultations regarding the matter. Over 100 gaming firms wrote a similar letter to the finance ministry, emphasizing that the tax would stifle foreign investment and jeopardize the $2.5 billion already invested in the sector.
No response has been received from PM Modi’s office regarding the request for comment. The tax proposal is currently awaiting approval from parliament.
Notable investors like Tiger Global and Peak XV, formerly known as Sequoia Capital India, have invested in Indian gaming companies such as Dream11 and Mobile Premier League.
In other news, the Nothing Phone 2 has been launched, leading to discussions about whether it will succeed or coexist with the Phone 1. More details about the recently released handset and other topics are covered in the latest episode of Orbital, the Gadgets 360 podcast. The podcast is available on various platforms such as Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, and Amazon Music.
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Eugen Boglaru is an AI aficionado covering the fascinating and rapidly advancing field of Artificial Intelligence. From machine learning breakthroughs to ethical considerations, Eugen provides readers with a deep dive into the world of AI, demystifying complex concepts and exploring the transformative impact of intelligent technologies.
