India's online gaming sector is facing potential upheaval as a new bill, approved by the Union Cabinet, is set to be introduced in Parliament. The bill aims to regulate the online gaming industry and make digital betting a punishable offense, addressing concerns related to addiction, fraud, and inconsistencies in state-level gambling laws. This move could significantly alter the landscape for online gaming platforms and users alike.
The proposed legislation, called the Promotion and Regulation of Online Gaming Bill, 2025, focuses on platforms where users pay money or stakes with the expectation of monetary returns. The bill explicitly excludes e-sports from this definition. The Ministry of Electronics and Information Technology (MeitY) is expected to be designated as the central regulator for online gaming, with the authority to block unregistered or illegal sites. The bill also proposes prohibiting advertisements of real money gaming while promoting e-sports and skill-based non-monetary online games.
Under the new bill, banks and financial institutions may be prohibited from permitting fund transfers for online money gaming. Penalties for offering or facilitating online money games could include imprisonment of up to three years, fines reaching ₹1 crore, or both, with harsher punishments for repeat offenders. Celebrities and influencers who endorse betting apps could also face penalties to deter misleading advertisements.
Since October 2023, the government has imposed a 28% GST on online gaming platforms. From FY25, winnings from online games are taxed at 30%, and offshore gaming operators have been brought under the tax net. New criminal provisions under the Bharatiya Nyaya Sanhita already impose penalties, including jail terms of up to seven years, for unauthorized betting. Since 2022, over 1,400 illegal betting platforms have been blocked.
Meanwhile, in a move impacting Indian exports, the United States has suspended the de minimis duty exemption, which allowed imports of goods valued under $800 to enter the U.S. without duties or taxes. The suspension, effective August 29, 2025, applies to all countries and terminates the exemption, citing national security, trade enforcement, and public health concerns. This change will affect India's low-value goods exports to the U.S., including handcrafted jewelry and mobile accessories.
The removal of the de minimis exemption will increase costs for Indian sellers, potentially making their goods less competitive in the U.S. market. Businesses may need to adjust pricing or absorb the additional tariff costs. While India's de minimis threshold is Rs 5,000 (approximately $60), significantly lower than the U.S.'s previous $800 limit, the U.S. suspension eliminates a key cost advantage for Indian sellers using direct-to-consumer e-commerce channels. Some experts believe this could benefit India in the long term as manufacturing adapts and shifts sourcing imports from other places.
Furthermore, a recent report indicates that the U.S. has imposed a 50% tariff on many Indian exports, effective August 27, 2025, potentially leading to a 40-50% drop in exports. This tariff targets textiles, seafood, jewelry, and more, significantly affecting India's economy and exporters. Personal shipments from India to the U.S. will also be subject to customs duties, with no de minimis exemption.
