DPIIT-Krafton MoU Boosts UK Startup Ties with Indian Gaming Sector

The recent Memorandum of Understanding (MoU) between India's Department for Promotion of Industry and Internal Trade (DPIIT) and South Korean gaming giant Krafton marks a significant shift in how UK startup founders can access India's rapidly expanding gaming market. For British tech entrepreneurs, particularly those in the games industry, interactive entertainment, and mobile app development, this partnership presents both direct investment opportunities and a clearer pathway into one of the world's fastest-growing digital economies.

The MoU, announced in early 2024, formalises Krafton's commitment to investing in India's gaming and startup ecosystem while establishing frameworks for talent development, technology transfer, and venture building. The implications extend beyond India's borders. UK-based gaming studios, mobile developers, and digital content creators now have a clearer route to Indian markets and potential partnership channels through one of gaming's most influential operators.

Understanding the Krafton-DPIIT Partnership

Krafton, the Seoul-headquartered developer behind PUBG and other global gaming franchises, has positioned itself as a key infrastructure player in India's digital economy. The DPIIT partnership is India's official investment promotion and industry development framework, making this MoU more than a commercial arrangement—it's a government-backed commitment to expand gaming infrastructure across the subcontinent.

Under the agreement, Krafton has pledged to establish research and development centres in India, develop local talent pipelines, and invest in early-stage gaming startups across multiple verticals. The company has committed to creating thousands of jobs in the Indian gaming and tech sectors while building out subsidiary studios and publishing operations.

For UK founders, this matters because Krafton operates on a global acquisition and partnership model. The company regularly scouts and acquires indie game studios, invests in complementary tech platforms, and partners with content creators across regions. A UK studio gaining traction or solving a specific gaming infrastructure problem now has a credible pathway to Krafton's investment apparatus through India's formal startup ecosystem.

What DPIIT Brings to the Table

The Department for Promotion of Industry and Internal Trade is India's primary engine for startup policy, incentives, and ecosystem development. DPIIT oversees the Startup India initiative, which provides tax benefits, regulatory fast-tracking, and access to government procurement contracts for registered startups. By formalising Krafton's involvement, DPIIT ensures the partnership aligns with broader Indian industrial policy goals around gaming, digital infrastructure, and export-led tech development.

This legitimacy matters for international partners. UK startups engaging with Krafton through DPIIT channels gain implicit government backing and access to Startup India's support infrastructure, including mentorship networks, regulatory clarity, and potential government-backed co-investment.

The Indian Gaming Market: Why UK Startups Should Care

India's gaming market reached approximately $2.5 billion in 2023 and is projected to exceed $5 billion by 2028. This growth is driven by several structural factors that create opportunities for UK-based gaming and interactive content companies.

Market Growth Drivers

• Mobile-First Adoption: Over 420 million mobile gamers in India, with the vast majority accessing games exclusively through smartphones. UK studios with strong mobile and casual gaming expertise have a natural fit.
• Localisation Demand: Indian publishers increasingly seek localised content, regional language support, and culturally resonant game design. UK studios with agile development practices can address this efficiently.
• Creator Economy Expansion: A rapidly growing creator and streamer base means demand for tools, publishing platforms, and content distribution infrastructure—areas where UK fintech and software startups can compete.
• Rising Disposable Income: Growing middle class purchasing power in tier-2 and tier-3 cities is expanding the addressable market beyond traditional metropolitan gaming hubs.

The Indian gaming sector remains fragmented compared to Western markets. Few dominant publishers control massive user bases, creating opportunity for specialist tools, middleware, and publishing services. UK teams often excel at building these enablement layers—payment processing, anti-cheat systems, analytics platforms, and community tools.

Competitive Advantages for UK Startups

UK gaming studios and interactive entertainment companies bring specific advantages to Indian partnerships:

• Established expertise in free-to-play monetisation models, which dominate India's market
• Strong track records in mobile and casual game development
• Access to UK-EU talent pools with global experience and language capabilities
• Familiarity with distributed, remote development teams—critical for managing India operations from UK headquarters
• Regulatory experience with GDPR and UK data protection frameworks, increasingly relevant as Indian publishers face stricter privacy requirements

Pathways for UK Startups to Engage

The DPIIT-Krafton MoU creates several concrete entry points for British founders and tech teams.

Direct Partnerships and Acquisition Routes

Krafton is an active acquirer of gaming studios and game tech companies. If your UK studio has shipped titles, built a user base, or developed proprietary technology (game engines, analytics platforms, monetisation tools), Krafton's growth mandate in India creates demand for acquisition targets. The company has previously acquired studios in Europe and North America—the India expansion simply increases their overall investment velocity.

To position your studio for partnership or acquisition:

• Build traction metrics: Monthly Active Users (MAU), retention rates, and monetisation data speak louder than pitch decks. Prove product-market fit in Western markets first.
• Identify IP with international appeal: Games that resonate across Western and Asian audiences have higher acquisition probability.
• Develop India-specific variants: Studios willing to localise content or adapt mechanics for Indian audiences are more valuable to Krafton's India strategy.

Startup India Registration and Co-Investment

If your UK startup has an Indian subsidiary or plans to establish one, registering with Startup India unlocks tangible benefits:

• Tax exemption on long-term capital gains for investors (under Section 54F of the Income Tax Act)
• Self-certification compliance for labour and environmental regulations
• Access to government procurement contracts and co-investment schemes
• Eligibility for fund management schemes supported by DPIIT

Several UK gaming startups have already established Indian operations to access these incentives while remaining operationally headquartered in the UK. The regulatory burden is manageable via professional services firms specialising in Indian startup compliance.

Accelerator and Funding Pathways

Krafton has signalled investment in India-focused accelerator programmes as part of the DPIIT partnership. Watch for announcements from:

• Krafton's Indian Venture Arm: The company is likely to launch or expand dedicated venture investment into Indian game studios and gaming infrastructure startups. UK teams with Indian co-founders or operations may be eligible.
• DPIIT-Backed Schemes: Innovate UK (UK government's innovation funding body) has established collaboration pathways with Indian startup schemes. UK founders with cross-border operations may access matched funding.
• Regional Gaming Hubs: States like Karnataka (Bangalore) and Telangana (Hyderabad) are building gaming clusters with dedicated incentives. UK studios opening development centres may access state-level tax holidays and infrastructure support.

For UK startups seeking early-stage capital, the expanded Krafton presence in India also means increased venture attention to gaming infrastructure, creator tools, and esports technology—areas where UK teams often lead.

Practical Steps for UK Founders

Assess Your Market Fit

Before committing resources to India expansion, honestly evaluate whether your product or service addresses a genuine gap in the Indian market. Generic gaming startups with no specific India angle will struggle. Specific advantages include:

• Payment processing solutions for tier-2 and tier-3 Indian markets (critical pain point)
• Regional language support and localisation platforms
• Anti-fraud and player safety tools (growing regulatory need)
• Creator monetisation infrastructure and streaming support
• Analytics and player behavioural platforms adapted for Indian gaming patterns

If your startup solves one of these problems, India expansion becomes credible. If you're building another generic mobile game, you need exceptional distribution or IP differentiation.

Build Local Partnerships First

Before approaching Krafton or seeking DPIIT recognition, establish relationships with Indian gaming studios, publishers, and accelerators. Organisations like IAMAI (Internet and Mobile Association of India) and regional gaming councils provide networking entry points. UK founders who can demonstrate understanding of Indian market dynamics and existing relationships are more credible acquisition or partnership targets.

Understand Compliance and IP Frameworks

India's intellectual property and data protection frameworks differ from UK regulations. Before establishing operations:

• Consult a legal firm specialising in Indian tech startup law (Companies House registration is straightforward, but IP assignment and data localisation require care)
• Review MeitY (Ministry of Electronics and Information Technology) guidelines on data localisation and payment security
• Understand tax implications: UK founders with Indian subsidiaries face cross-border tax considerations requiring professional accountancy support

Leverage UK Government Support

GREAT (UK's official international trade development programme) provides market research and export support for UK tech companies expanding into India. The Department for Business and Trade (DBT) also funds market access activities. If you're a SEIS or EIS-eligible startup with India ambitions, these programmes are worth exploring for grant funding or matched investment.

Consider Infrastructure Partnerships

UK startups providing connectivity, infrastructure, or operational support to gaming studios benefit from the sector's growth. If your team operates in backend services, cloud infrastructure, or content delivery networks serving gaming studios, positioning your business to support Krafton's Indian expansion creates a direct revenue pathway. Companies providing dedicated internet connectivity to game development studios—particularly those supporting remote, distributed teams across UK and India—now have a structural tailwind as the industry scales.

Broader Implications for UK-India Tech Relations

The DPIIT-Krafton MoU sits within a larger context of deepening UK-India tech partnerships. Both nations are signalling intent to expand collaboration in startups, digital infrastructure, and emerging technology sectors. This partnership is a template for future sector-specific collaborations across fintech, healthtech, and enterprise software.

For UK founders, the signal is clear: India is no longer a purely outsourcing or services destination. It's becoming a core market for UK-built products and a credible partnership source. The formalisation of Krafton's India strategy through a DPIIT MoU legitimises this shift and creates lower-friction pathways for British startups to participate.

Key Takeaways for UK Startup Founders

• The DPIIT-Krafton MoU is not just Indian policy—it signals expanded investment and partnership opportunities for UK gaming studios and gaming infrastructure startups.
• India's gaming market is large, growing, and fragmented, creating opportunities for specialist tools, publishing services, and localisation support from international teams.
• Direct acquisition by Krafton is possible for UK studios with proven traction; co-investment and partnership routes are accessible through Startup India registration and government-backed schemes.
• UK founders with specific expertise (payment processing, creator tools, localisation, safety infrastructure) have clearer pathways than generic game developers.
• Compliance and legal setup in India is manageable but requires professional support; don't navigate this alone.
• Regional gaming hubs in India (Bangalore, Hyderabad) now have government backing for infrastructure investment, making them credible bases for UK studio operations.

The gaming sector's expansion in India, catalysed by Krafton's formalised commitment, creates a genuine opportunity window for UK startups. The key is moving fast, understanding the market, and positioning your business as a solution to Indian gaming's specific challenges rather than a generic entrant chasing scale.