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The Indian gaming market is likely to hit the $7.5 billion valuation mark by FY28 - a 20 per cent CAGR growth - driven by increasing in-app purchases and advertising revenues in casual and mid-core games, a new report said on Thursday.

The Indian gaming industry clocked $3.1 billion in FY23 revenue.

Demand for games in India was robust with 15.4 billion gaming downloads in FY23, marking India as one of the largest gaming markets in the world, according to the 'State of India Gaming' report by gaming and interactive media fund Lumikai, in collaboration with Google.

There are over 568 million gamers in the country – over 50 per cent of all Indian internet users.

"Indian gaming has been on the rise because of rapid digitisation, growth in new gamers and new paid gamers, and increasing diversity of gaming content consumed. Even though funding has slowed down this year, the outlook towards the gaming industry is extremely positive," said Salone Sehgal, Founding General Partner.

The data also sheds light on India's global position as one of the leading countries globally for total mobile game downloads. Over 50 per cent of all Indian internet users account for the gaming population in the country. This number grew by 12 per cent in FY23, according to the report.

The data also highlighted how the average time spent on gaming increased by 20 per cent, to 10-12 hours per gamer per week.

About 59 per cent of gamers are male and 41 per cent female, with 66 per cent coming from non-metros. Over 58 per cent of users said they partake in in-app purchases, with 62 per cent of users claiming that UPI is their preferred mode of payment for games, the report mentioned.