In the last decade, India’s internet economy has exploded on the shoulders of the Jan Dhan, Aadhaar and Mobile (JAM) trinity. Digital democratisation, powered by near-universal access to banking, has created a massive market for digital services. With over 900 million smartphone internet connections, the Indian digital ecosystem has shifted drastically from being an exporter of software and skilled labour to becoming the world’s largest real-time payment market.

Between 2017 and 2023, retail digital payments surged 50.8%. Today, our digital ecosystem is pegged to be the fastest-growing market in the world. It accounted for 4.5% of India’s gross domestic product (GDP) in 2014 and is expected to contribute 20% of the GDP by 2026.

Life has certainly changed for the average Indian. The internet economy has unleashed access and convenience like never before. Sectors like e-commerce, health, insurance, and investment have undergone large-scale digital transformation, creating lakhs of opportunities for budding entrepreneurs. Perhaps that’s why it’s no surprise that several unicorns have become essential partners in our day-to-day lives.

While there are several contributors to this mega propulsion, amongst them is the gaming sector. Home to more than 45 crore gamers, including 0.18 crore e-sports players, Indian online gaming is estimated to reach ₹66,000 crore, growing at a CAGR of 14.5% between 2023–2028.

This fast-paced growth, however, has come hand-in-hand with a host of cyber-related issues. Today, we see a proliferation of cases where consumers have fallen in the traps of unscrupulous entities leading to financial loss, among other things. If I were to highlight some recent examples:

• In August 2024, Indian investigation agencies busted a fin-tech scam which laundered money through an elaborate web of Indian and Chinese nationals, instant messaging apps, companies and crypto exchanges.
• In numerous instances, agencies have cracked down on Chinese loan apps for trapping unsuspecting consumers with predatory lending practices.
• Another fintech company based in Ahmedabad was accused of using 150 bank accounts to launder hundreds of crores generated from illegal betting.

These are just three examples, but they highlight an important theme – that the end-user was not aware that the apps they were using were illegal, and that their data was being used for unlawful activities.

In the gaming sector, a reasonable approach to tackling this menace could be by creating a ‘whitelist’ framework. A whitelist in simple terms, is a mechanism to differentiate legitimate from the illegitimate businesses or apps. This could work equally well for all sectors of the digital economy be it fintech, gaming, crypto, OTT or social media.

Differentiating legitimate apps from illegitimate ones might seem like a regulatory puzzle, but it could be simplified by four easy-to-answer questions. To put checks and balances in place, the government must know:

• Is the company registered in India, with India-based offices?
• Is the company registered to pay taxes (GST) in India?
• Does the company self-declare to follow applicable laws on taxes, grievance redressal, advertising, and product/service quality concerning their sector?
• Businesses that tick the above boxes may be presumed to be operating in good faith and could earn a ‘symbol of trust’ which would help separate the wheat from the chaff.

 Cyberspace and, therefore, the crimes committed in it, thrive on anonymity with nameless, faceless entities. By creating a ‘symbol of trust,’ a consumer can differentiate between a legitimate business offering lawful and good quality products and services from the illegitimate fly-by-night operators. An offline example of such a symbol of trust is the ISI mark – which became a standard quality and compliance mark for products since 1950. On one hand, it helped consumers identify and buy quality products, and on the other, it set a benchmark for manufacturers who wanted to do business in the market.

The digital ecosystem needs similar symbols of trust to assure consumers that the product is legal, authentic and compliant with the digital laws of India. The onus of this trust-building measure should not solely lie on the shoulders of businesses. Not all businesses may see the need for it, and more importantly, consumers may not trust a ‘symbol of trust’ that private businesses create. Therefore, to stay ahead of the ever-shifting digital curve requires a concerted and coordinated effort between industry, government and society.

The end goal is the same for everyone: To create guardrails so consumers and industry can be protected from fly-by-night operators. This is now mission-critical in our national goal of having a trillion-dollar digital economy.

This article is authored by AK Pandey, former joint advisor, TRAI, New Delhi.