Budget 2026: From gaming to streaming, M&E sector urges government for tax relief, infrastructure push

As Union Finance Minister Nirmala Sitharaman prepares to present Budget 2026-27 next week, India’s media and entertainment (M&E) sector is sharpening its expectations pitch. For FY27, the sector’s broad asks from the government include placing gaming and esports at the centre of India’s creative economy, along with enabling policy changes around taxation, content creation, and digital distribution.

After two Union Budgets that offered limited sector-specific relief, industry leaders say the upcoming Budget represents a moment to move from regulatory consolidation to growth enablement, especially for fast-scaling digital and creative businesses.

Gaming leads the charge

India’s gaming and esports ecosystem, now one of the world’s largest by user base—India had 500 million active gamers in 2025, per a report by Redseer and BITKRAFT Ventures—argues that while regulatory clarity has improved in recent years, fiscal policy has yet to reflect gaming’s role as a “skill-based, IP-driven export opportunity” rather than a narrow consumption category.

At the top of its wishlist is formal recognition of esports as a sport, a move industry leaders believe would unlock sponsorships, institutional funding, and fairer tax treatment of prize winnings.

“If esports is recognised on par with traditional sports, prize money should be treated similarly from a taxation standpoint,” according to Akshat Rathee, Co-founder and MD of NODWIN Gaming. “That alone would significantly improve the sustainability of professional competitive gaming in India,” he said.

Beyond industry recognition, gaming startups are also seeking tax clarity and parity across formats, spanning game development, esports tournaments, in-game monetisation, and platform revenues. Industry executives argue that fragmented interpretation of tax rules continues to create uncertainty for investors. And there is a need for clear differentiation between “speculative” gaming and “skill-based” creative ventures.

The sector is also pushing for export incentives, incubation funding, and specialised skilling programmes, arguing that gaming is among the few digital segments where India can realistically build global-scale IP.

Slash GST on OTT subs

Beyond gaming, the broader media industry, which includes OTT platforms, broadcasters, and digital publishers, is rallying around one critical demand: reduction of GST on television and OTT subscriptions from the current 18% to the proposed 5%.

In its pre-Budget memorandum submitted to the GST Council and the Ministry of Finance, industry bodies have argued that the current tax rate treats digital content as a “discretionary luxury service”, which it is not, as it functions as a mass-access service consumed daily across income groups. “TV and OTT are primary sources of news, education and entertainment for Indian households,” it noted.

Executives highlighted the inconsistency between cinema tickets, which enjoy concessional slabs (and differentiated thresholds), and digital subscriptions that fall under the top slab.

“A household subscription delivers content to multiple viewers over an entire month. Taxing that at 18% while cinema tickets enjoy lower slabs (12%) is a structural inconsistency,” Avinash Pandey, CEO of the Indian Broadcasting and Digital Foundation (IBDF), stated in the memorandum to the government.

Executives further say that a lower GST rate would immediately improve affordability and broaden subscription penetration, particularly in Tier-2 and Tier-3 markets, while also growing adoption of connected TVs (which saw duty cuts earlier) and advertising reach over time. Broadcasters add that GST rationalisation must also be accompanied by simpler compliance rules.

Not just TV, but across film, series, music, and digital-first formats, studios are reiterating the need for tax incentives tied to content creation and IP ownership. While India is one of the world’s largest content producers by annual volumes, industry leaders say monetisation and export scale remain constrained without proper policy support as cost pressures rise.

“We can reduce the amount of unnecessary money being blocked in working capital for companies in the sector by reducing the TDS rate from 10% to much lower rates. We should also consider providing a simpler GST assessment process by introducing a framework of centralised assessments, which operated smoothly during the service tax regime,” Ravi Mahajan, Partner, Technology, Media & Telecom, EY India, shared.

Skill development is another priority for the M&E sector. With rising demand for VFX artists, editors, sound designers, game developers, and newsroom technologists, the industry wants dedicated skilling and apprenticeship programmes aligned with emerging formats such as immersive media and AI-assisted production.

The last two Union Budgets had offered limited direct sops to the M&E sector, focusing instead on macro consumption support and digital tax clean-up. Industry leaders now see Budget 2026–27 as an opportunity for the government to send a clearer signal that creative industries, gaming, and digital storytelling are key economic growth engines, not merely peripheral lifestyle categories.

In essence, the industry wants content to be treated as infrastructure—something that drives employment, exports, and cultural influence and creates long-term economic value for India.