Global Investors Write To PM Modi On Gaming Tax, Cite Adverse Impact On Sector

In a letter to Indian Prime Minister Narendra Modi, 30 foreign and domestic investors said that the 28 per cent gaming tax will have a negative impact on USD 4 billion in potential investments. As per an international media agency, Tiger Global, Peak XV, and Steadview Capital are amongst those investors.

It may be recalled that India last week declared the tax on the revenue that online gaming companies collect from their users. Games like fantasy cricket have been increasingly popular in recent years, but have also prompted concerns about addiction among gamers.

The tax ruling "has caused shock and dismay, (and) will substantially and meaningfully erode investor confidence in the backing of this or any other sunrise sector in the Indian tech ecosystem," according to a letter signed by the investors and quoted by the media agency.

The letter added that the decision will “adversely impact prospective investments to the tune of at least $4 billion in the next 3-4 years and hence the growth of the gaming sector in India.” This is being quoted as the first instance of direct lobbying by investors against the tax move.

It may be mentioned here that the tax proposal is pending parliament’s approval.

Previously known as Sequoia Capital India, Tiger Global and Peak XV have invested in Indian gaming startups like Dream11 and Mobile Premier League. Over 100 gaming firms wrote a letter recently to the finance ministry with a similar request, saying the tax will stifle foreign investment and put USD 2.5 billion already invested in the sector at risk.