Union budget pushes for animation, visual effects, gaming and comics sector

Union minister of finance Nirmala Sitharaman announced a push for the animation, visual effects, gaming and comics (AVGC) sector as part of the annual budget on Tuesday with the setting up of an AVGC promotion task force.

“The animation, visual effects, gaming, and comics (AVGC) sector offers immense potential to employ youth. An AVGC promotion task force with all stakeholders will be set up to recommend ways to realize this and build domestic capacity for serving our markets and the global demand,” the minister said in her budget speech.

At an event in September 2020, representatives of the ministry of information and broadcasting had said they are not only working with the Indian Institute of Technology (IIT) Bombay to develop a centre for training and content creation in animation and gaming that should come up in a couple of years but are also drafting a national AVGC (animation, visual effects, gaming) policy.

Media and entertainment industry experts called the AVGC task force announcement a step in the right direction given the rapid strides India has made in the segment with potential to generate employment.

“The focus on establishing an AVGC taskforce involving stakeholders comes as a huge promise for all the players in the media and entertainment sector. We are taking centre stage globally in representing India in specifically tech-led entertainment and arts," said Priyanka Khimani, legal and business expert on IP (intellectual property).

However, what the industry needs is adequate support in terms of budgets and regulations to be able to do justice to the immense talent and capability that the country has to offer, to be able to truly scale, she added.

Neeraj Roy, founder and chief executive officer, Hungama Digital Media that owns a gaming app called it a budget that is welcoming web 3.0. “It is their (the government’s) way of ushering in a New India into the Metaverse,” Roy said.

According to a recent report by the Confederation of Indian Industry (CII) along with the Boston Consulting Group (BCG), in 2021, the Indian VFX and animation market bounced back by 30-50% post a difficult year in 2020 and was valued at $0.9 trillion-$1.1 billion. India commands around 10% share of the global VFX and animation market but has the potential to scale up to 20-25% through structural interventions, the report had said. In 2019-2020, the sector managed to create 45,000-60,000 jobs which can be scaled up to 75,000-120,000. The overall gaming market, on the other hand, is estimated at around $2 billion-$3 billion.

With the ban on Chinese apps, India has been able to unlock its local talent to develop high-end gaming mobile applications and many Indian startups have emerged in this space, said Ritesh Kumar, partner at legal firm IndusLaw. “The setting up of the task force will bring in a direction to how the industry will mature and take on global competition,” Kumar added.