It took a mere six minutes in the Lok Sabha and a few minutes more in the Rajya Sabha to wipe out an established industry. In a matter of 48 hours, the passing of the Bill on Promotion and Regulation of Online Gaming Bill 2025 has adversely impacted 2,00,000 direct employees, Rs 23,613 crore in investments, over Rs 4,500 crore in advertisements and Rs 20,000 crores in direct and indirect taxes.
The Bill, now an Act, was introduced in Parliament without undergoing the due process of a draft for public opinion, stakeholder consultations, or, at the very least, a warning. Policy corridor whispers imply that even allies were not aware of such a move. A decade-old, established sector constitutionally guaranteed under Article 19 has been asked to wrap up operations and told it will be held liable for criminal actions, including those of its employees, if it doesn’t comply. While the Act aims to safeguard public health and address the concern of offshore illegal platforms, any ban, especially in the digital space, has consistently proven to have amplified the issue multiple times. The immediate fallout would include economic disruptions, shifts in user behaviour, and social harms.
The opaque strategy adopted by the government in this case highlights the grave direction that policy-making is taking in India. The uncertainty goes far beyond the online real money gaming sector and will set a precedent for future policies in each sector. This swift and unconsulted legislative strike is not just a regulatory misstep but a stark warning of the growing unpredictability in India’s policy landscape, one that could unravel investor confidence, domestic business trust, and exacerbate systemic issues like brain drain of talent and businesses.
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Economic disruptions amplified by policy haste
The immediate economic toll is staggering and underscores the bill’s shortsightedness. Beyond the 2,00,000 direct jobs at risk, it affects ancillary industries like fintech, advertising, and content creation. Annual GST revenues of Rs 20,000-25,000 crore and TDS of Rs 1,080 crore (FY24) will evaporate, creating fiscal gaps at a time when India’s fiscal deficit stands at Rs 15.77 lakh crore, amounting to 4.8 per cent of GDP.
But the real cautionary tale lies in the investor disarray this creates. A reported foreign direct investment (FDI) of $2.7 billion and startup funding of $2.8 billion in real money gaming are now stranded. This unpredictability echoes broader patterns in India’s policy environment, where sudden changes deter long-term commitments. For instance, the 2019 e-commerce FDI rules, which restricted inventory models for e-commerce platforms, led to a reported slowdown in US-India tech investments, with firms citing regulatory whiplash as a key barrier. Similarly, retrospective tax demands in the past (e.g., the Vodafone case) have been linked to a dip in FDI inflows, with studies showing that economic policy uncertainty reduces FDI by up to 30 per cent in emerging markets like India. The 2025 Kearney FDI Confidence Index highlights regulatory complexity and ease of doing business as concerns for investors in India, potentially shoving off billions in inflows amid global uncertainties like US tariffs.
Businesses, particularly in the digital economy, thrive on stability. This bill’s passage without stakeholder input, bypassing the Pre-Legislative Consultation Policy, sends a chilling message: Today’s thriving sector could be tomorrow’s casualty. As the industry voices alarm, with petitions likely heading to courts, the precedent risks cascading effects on adjacent digital fields where India aims for global leadership but faces investor hesitation due to such volatility.
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Cautionary exodus of talent
In the larger scheme, this policy unpredictability is accelerating India’s brain drain, particularly in tech and digital innovation, where skilled professionals seek more stable environments abroad. Data from 2025 reveals a stark reality: Over 1,05,000 global tech layoffs this year alone, with 20 per cent occurring in India, have pushed thousands of engineers and developers to migrate. Goldman Sachs reports that India’s share of PhD-level AI researchers remains minuscule, with brain drain siphoning talent to the US and Europe, where emigration rates for high-skilled individuals range from 10 to 50 per cent. Annually, thousands of Indian engineers and scientists leave for Silicon Valley, driven by domestic frustrations such as inadequate research funding, bureaucratic hurdles, and erratic regulations.
The UN Trade and Development Technology and Innovation Report 2025 warns that without stable policies to retain talent, AI and tech sectors risk further “brain drain,” shifting innovation hubs to countries like the US or Singapore. In the wake of the gaming ban, developers from firms that have been laid off may join this exodus. Even if they do not, it will exert unprecedented pressure on the IT job market, already grappling with layoffs, potentially driving down industry salary standards. This not only hollows out India’s human capital but also undermines its ambition to become a $1 trillion digital economy by 2028.
Also read: Game over for online gaming? How courts, state laws dealt with long-running ‘skill vs chance’ debate
A call for prudent policymaking
India’s digital future hangs in the balance. The bill’s draconian approach risks more damage than good, fostering underground economies and eroding trust. This isn’t just a gaming crisis; it’s a wake-up call for India’s democratic process. The government’s apparent pride in executing this Bill with secrecy, blindsiding the industry, is a hollow victory. The bypassing of legislative scrutiny and stakeholder engagement undermines the foundational principles of democratic governance, potentially leading to a systemic erosion of public trust, business confidence and economic stability. To avoid investor disarray and STEM brain drain, policymakers must ensure transparency, consultations, and evidence-based reforms. Otherwise, this precedent could deter the very investments and talent needed to build a resilient economy. The gaming sector’s fate should serve as a wake-up call: Predictability isn’t a luxury; it’s essential for growth.
Karti P Chidambaram is a Member of Parliament for Sivaganga, and a Member of the All India Congress Committee. His X handle is @KartiPC. Views are personal.
(Edited by Theres Sudeep)