India’s Union Budget 2026 has put a spotlight on the Animation, Visual Effects, Gaming, and Comics (AVGC) sector. It emphasizes skills development, digital infrastructure, and creative opportunities. While the initiatives promise to strengthen the digital content ecosystem, competitive gaming and esports remain on the sidelines. These fields lack dedicated funding or regulatory clarity.
AVGC Labs and Digital Infrastructure
Finance Minister Nirmala Sitharaman highlighted AVGC as a cornerstone of India’s emerging “Orange Economy.” She projected a need for 2 million professionals in the sector by 2030. To support this, the government is backing the Indian Institute of Creative Technologies (IICT) in Mumbai. This institute plans to establish AVGC Content Creator Labs in 15,000 secondary schools and 500 colleges nationwide. These labs aim to introduce students to animation, digital storytelling, and gaming from a young age. In turn, this helps convert interest into practical skills.
The budget also allocates ₹12.2 lakh crore ($135 billion) for digital infrastructure, including faster 5G connectivity and reduced latency. These enhancements benefit streaming, gaming, and esports events. The Ministry of Youth Affairs and Sports receives ₹4,480 crore ($495 million) to launch a ten-year Khelo India Mission. However, esports is not explicitly included. Experts suggest that the improved infrastructure and training pipelines could eventually integrate competitive gaming into broader national sports initiatives.
Online Gaming Regulation Still Pending
While AVGC has a clear roadmap, online gaming in India remains uncertain. The Promotion and Regulation of Online Gaming Act (PROGA), passed in August 2025, has yet to be enforced. The Supreme Court is reviewing petitions challenging PROGA’s blanket ban on real-money gambling. There are questions about whether it infringes on the right to engage in skill-based games like poker and rummy.
Critics argue that PROGA’s unclear definitions of skill versus chance are driving players to offshore platforms. On these platforms, reported usage has surged from 3.4% to 44%. The law cites concerns over fraud, money laundering, and annual losses of ₹20,000 crore ($2.21 billion) affecting around 4.5 million consumers. While esports and social gaming remain legal, violations carry penalties of up to 3 years imprisonment and fines of ₹1 crore ($110,600).
Industry Voices Call for Esports Recognition
Industry leaders recognize the AVGC push but urge policymakers to bring esports into the regulatory fold. Shiva Nandy, CEO of Skyesports, highlighted initiatives like the Chennai Esports Global Championship as proof that competitive gaming is growing. However, it remains underrepresented in national policy. Partnerships like Skyesports and IICT show potential pathways to integrate esports within broader skill development programs.
Other experts emphasized the importance of scaling AVGC labs for workforce development. Akshat Rathee of NODWIN Gaming noted the labs would create a talent pipeline for animation, gaming, and digital storytelling. Animesh Agarwal, CEO of S8UL Esports, stressed disciplined training is key to sustaining the rapid growth of India’s gaming industry. Vishal Parekh, COO of CyberPowerPC India, added that high-performance computing infrastructure will be essential to support young creators. Meanwhile, Sagar Nair of LVL Zero Incubator highlighted that combining skill training with incubation and entrepreneurial support can help students develop IP and compete internationally.
Looking Ahead
India’s 2026 budget signals a clear commitment to the digital content economy, but esports still waits for its moment. With strong AVGC investments, a new generation of creative talent is being cultivated. This process lays the foundation for India to emerge as a global hub for animation, gaming, and digital storytelling. However, this will only happen if regulatory clarity and policy recognition for competitive gaming arrive soon.
