A task force set up by the Indian government, in collaboration with industry stakeholders, has recommended tax related incentives for the Animation, Visual Effects, Gaming and Comic (AVGC) sector, apart from launching a ‘Create in India’ initiative to push for content and IP creation in India for global consumption and setting up a Game Development Fund.

“Taxation related incentives such as tax breaks, tax holidays, etc. may be devised to boost local IP production, R&D, and investment in the AVGC industry. There is also a requirement to rationalize various taxes (including GST)…to reduce the cost to users, enhance financial viability and make the  (AVGC) sectors more competitive,” the task force, under the chairmanship of MIB Secretary Apurva Chandra, has recommended.

A Group of Ministers under the GST Council is already deliberating on the matter of taxation in the gaming sector. The  task force report said efforts should be made to attract foreign gaming companies for co-productions and relocation to India through incentives.

The  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 sector.

It has suggested creation of high-quality content in vernacular or local Indian languages for promotion of Indian culture, heritage and folk arts globally.

Some of the other content and IP-related recommendations include the following:

• Promotion of international co-productions to help Indian films and AVGC services get global audiences.
• Creation of global content in the country, making India a global hub for the AVGC sector.
• Creation and protection of Intellectual Property in the AVGC-XR sector.
• Engaging AVGC-XR (where XR means augmented and virtual reality) software/product developing companies to reduce cost of acquisition of software.
• Entertainment and gaming industry producers to be encouraged to transform certain successful films (box office/ critically acclaimed/ popular characters, etc.) into games through a dedicated mechanism of cooperation between the entertainment and gaming industry.
• Transparent mechanisms for knowledge sharing may be established through collaboration among industry associations in the film and entertainment industry and the gaming industry.
• Global studios may be incentivized to tap into stories from India for gaming content and local IPs.
• The existing co-production treaties with nations to be amended to also include AVGC sector.
• To promote creation and consumption of indigenous animation content, giving an opportunity to domestic players to compete with international players in the domestic as well as international markets, there should also be provisions for mandating content reservation for local animation content.
• In cooperation with the Ministry of Culture, digital and authentic resources of Indian literature may be made available. Similar approach may also be adopted in respect of historical and folklore-based narratives.
• Mechanisms for promotion of indigenous comics, movies and animation ecosystems may be established to build a strong pipeline of ideas for gaming.
• States may also consider reimbursing a portion of investment made by companies to create content based on Indian themes.

“Government of India may commission a ‘Game Development Fund’ along with industry to promote and educate consumers/players on responsible gaming. Wherein the companies contribute 1 percent of their annual net profits to promote and educate stakeholders.

“Under international agreements, such as co- production treaties and other trade agreements, AVGC should be considered as a priority sector to gain access to focused incentives. This will also give domestic AVGC companies an opportunity to operate competitively in international markets,” the report pointed out.

Meanwhile, an official government statement said the main recommendations of the task force can be categorized broadly under four categories

Domestic Industry Development for Global Access: Apart from giving a push for local content and IP creation, the task force has suggested institution of an international AVGC platform, along with a gaming expo with focus on FDI, co-production treaties and innovations.

It has also suggested establishment of a National Centre of Excellence (COE) for the AVGC sector to become an international reference point across skilling, education, industry development and R&D for the AVGC sector.

Regional COEs could be instituted in collaboration with the State governments to provide access to local industries and to promote local talent and content.

Developing Talent Ecosystem to Realize Demographic Dividends: The task force has exhorted the government to leverage the new education policy to develop creative thinking with dedicated AVGC course content at school levels, to build foundational skills and to create awareness about the sector as a career choice.

With an eye on the demand of 20 lakh (20,00,000) skilled professionals in AVGC sector in this decade, augment skilling initiatives for AVGC sector under MESC, the report stated.

Enhancing Tech & Financial Viability for Indian AVGC Industry: Interestingly, the task force has suggested democratisation of AVGC technologies by promoting subscription-based pricing models for MSME, start-ups and institutions.

Other suggestions include promoting Made in India AVGC technologies through incentive schemes for R&D and IP creation and evaluating a performance linked incentive scheme for hardware manufacturers.

Raising India’s Soft Power Through Inclusive Growth: Creation of a dedicated Production Fund for domestic content creation from across India to promote Indian culture and heritage globally is another recommendation.

It has also exhorted the government to evaluate reservation for high-quality indigenous content by broadcasters.

For an inclusive India, target skilling and industry outreach for youth in tier 2 and 3 towns and villages, while giving special incentives for women entrepreneurs in AVGC sector are some of the other recommendations of the AVGC task force.