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1 size fits all? Industry welcomes policy on animation, VFX, gaming & comics but flags concerns

Some concerns include whether government will cross barriers & change its taxation system. Another focus area for industry stakeholders is Intellectual Property (IP) creation.

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New Delhi: While the industry has welcomed the Ministry of Information and Broadcasting’s Animation, Visual Effects, Gaming and Comics – Extended Reality (AVGC-XR) mission document released last week, it has pointed out that clubbing all of these industries together could be problematic since they are each significant sectors in their own right. 

Through its taskforce, the Ministry intends to oversee a larger central policy on “creating job opportunities” and setting up “training schools and centres” among others in these sectors. The task force is headed by I&B secretary Apurva Chandra, and the Ministry has pitched for a larger financial outlay in order to develop these sectors.

“The Animation, Visual Effects, Gaming and Comic (AVGC) Task Force has called for a National AVGC-XR Mission with a budget outlay to be created for integrated promotion and  growth of the AVGC sector. The Task Force has also recommended launching a ‘Create in India’ campaign with an exclusive focus on content creation, In India, For India & For World,” the government release said.

According to the AVGC draft policy report, estimates by the NITI Aayog indicated that the “animation and VFX sector in India was valued at USD 1.131 billion” till 2021. It also states that this sector “can be the next IT-BPM boom for India” and has the potential of becoming “a USD 100 billion M&E industry by 2030”.

Even for the online gaming sector, significant growth was witnessed. The “segment grew by 28 per cent in 2021 to reach USD 1.9 billion”, the report read. Estimates also indicated that this sector is “growing steadily for the last five years” and “expected to be 3 times in value and reach USD 3.9 billion by 2025”.

Also Read: IT Ministry’s new draft rules propose ban on betting in online games, moots self-regulatory body

‘Taxation on domestic IPs should be removed’ 

Although this “much awaited” move evoked a positive response from the industry, there are concerns about how all the sectors mentioned are clubbed together in one policy and whether the government will cross barriers and change its present taxation system. Intellectual Property (IP) creation, too, is a significant area of concern, with sector experts saying that taxation on domestic IPs should be exempted so that there are more funds accessible for innovation.

The global animation and visual effects market size, according to the AVGC report, was estimated at $168 billion in 2021 and is projected to grow to $290 billion by 2024 at a CAGR (Compound Annual Growth Rate) of 10.94 per cent between 2020 and 2026.

“I think India has everything it needs to excel in this sector globally,” Shubham Gupta, co-founder of STAN, a blockchain-based fan engagement platform dedicated to fans of gaming creators and esports players, told ThePrint. “All kinds of content can be produced in India, and there is no lack of stories or ideas.”

“Although this move by the Ministry is extremely well taken, we have to remember that all the said sectors are huge industries in themselves and clubbing them together may not fulfil their individual budgetary and ancillary requirements,” Gupta added. 

However, he also said that depending on the government alone for “all the string-pulling” is also not sustainable. 

“The leadership in the industry are also expected to contribute significantly, probably procure the funds and ensure the right people work for a project and build credibility,” Gupta said. “I would not say that this is not happening already, just that perhaps it is happening on a smaller scale.”

International treaties & ‘access to funds’

That said, there are several aspects of the government’s policy that industry players do agree with, especially those pertaining to taxation-related incentives, the introduction of dedicated educational institutions, and international agreements.

“AVGC is a relatively new industry in India and therefore there is no legal certainty. There is a lack of education and training modules in this sector. Despite being one of the fastest-expanding sectors and producing significant employment, no government assistance or support is readily available in this area,” said Abhinav Singh, CEO of DesiAddaES, a “playtech” platform.

The policy’s recommendations on easing the access to funds for these sectors were also welcomed. 

“Recommendations such as the inclusion of the AVGC sector in various schemes to enable access to funds, considering AVGC as a priority sector in international agreements to gain access to initiatives and taxation-related incentives will create an ideal ecosystem for AVGC in India,” P. Jayakumar, CEO of Toonz Media Group, which was part of the government’s stakeholder discussions, told ThePrint. 

“Apart from the National and Regional Centres of Excellence, the proposal to leverage NEP ( National Education Policy) and to develop creative thinking with dedicated AVGC course content at school levels is something I would like to mention.” 

However, there is also a sentiment that the government should be more effective in bagging international tie-ups so that there is enough access to funds.

“Looking at how the industry has evolved over the years. It is imperative that the government considers the industry’s request to enter into more co-production treaties with countries that are relevant to animation business. This will provide access to incentives which in turn will give a much-needed fillip to industry,” Jayakumar added.

India lagging in intellectual property rights

According to Gupta, India has lagged behind in terms of global reach and innovation. 

“How many apps do you have on your phone which are, in their entirety, built by Indians and are as famous as apps from other countries?” he asked. “There has been a lack in terms of innovation, quality or the creation of really good IPs.”

Intellectual property refers to the creation of creative inventions that could be patented and copyrighted. According to the report, the government intends to work on “incentive schemes for R&D (Research and Development) and IP creation” and also “enhance Ease of Doing Business in the AVGC sector, i.e. tax benefits, import duties, curbing piracy, etc.”

Experts believe that this is a good move considering there were “missed opportunities in the past” leading to a larger “perception problem” that could now be fixed.

Edited by Geethalakshmi Ramanathan

Also Read: Animation classes to Experiential Art degree: A govt roadmap to boost gaming & content sector




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