Is India's new online gaming tax playing for keeps or betting on a boost?

Hello, and you're listening to the Marketplace Morning Report.

Live from the BBC World Service, I'm Leanna Bern, very good morning to you.

India's online gaming industry is big, it's worth around $1.5 billion.

There's lots of startups as well as international investors, but now there's a new tax.

More than 100 gaming companies have been lobbying the government asking it to change its mind.

But as of yesterday, 28% tax and the money these companies make from their customers came into force.

It affects any side, offering a cash prize from online casinos to fantasy cricket in a country where most states have banned gambling.

The BBC's India Business Correspondent, Inekil Al-Mamdar says it's going to have a huge impact.

One of the startup founders that I spoke to describe this as a body blow to the industry,

because essentially what used to happen till now is that a lot of the online gaming startups would pay a small tax on the commissions that they earned from many of the online gamers.

Now essentially a 28% goods and services tax would be levied on the entire face value of the transaction.

So this coupled with things such as fees, commissions, good take, the tax to a higher 50% according to one of the lawyers that I spoke with.

And this essentially means that gaming would become unattractive for many players and some even suggest that there could be a spate of bankruptcies that we could see in this sector.

So why is the government pursuing this policy?

Well, the government principally wants to do this to make sure that gaming, which it considers similar to speculative activities such as gambling, for instance, of betting is not taxed at a lower rate than essential services.

That's their principal stance. However, the industry essentially is of the view that this tax regime of 28% on the face value is inconsistent with global standards.

That was Nick Hale and Amda reporting. Now let's do the numbers.

It's a mixed picture on the markets today. Europe's region wide socks 600 is down three tenths of percent. London's FTSE 100 is down by four tenths of a percent.

Meanwhile, China's financial markets are closed for its national holiday. Golden week.

Let's talk about Ukraine now. The short-term funding deal passed by Congress to avoid a government shutdown excluded any more aid for Ukraine, which some of Republicans oppose.

Meanwhile, over in Europe, foreign ministers are having their first ever meeting in Ukraine's capital Kiev. They're gathering to show their support and solidarity.

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