For decades, India’s economic script revolved around steel, silicon and seeds. We measured our progress by the length of our highways, tonnage of our wheat and volume of our software exports. But the 2026-27 Union Budget signals a new hue in India’s growth imagination: the ‘orange economy’. Coined by the Inter-American Development Bank, the term refers to industries where creativity, culture and intellectual property generate economic value.
In her Budget speech, Nirmala Sitharaman did more than celebrate culture as soft power; she positioned it as hard economics. With India’s media and entertainment sector valued at ₹2.87 trillion ($35 billion) in 2026, storytelling is fast becoming a strategic asset class.
India’s services sector has long been a high-growth anchor, but the traditional IT and business process management model is maturing. Sustaining 7-8 percent GDP growth requires a new frontier. The creative economy—already estimated to contribute roughly 8 percent of India’s workforce, compared to 2.1 percent in Australia and 1.9 percent in South Korea—may well be it.
The Budget’s focus on the sector comprising animation, visual effects (VFX), gaming, comics and extended reality acknowledges how the digital generation earns. A VFX artist in Pune or a game designer in Hyderabad now matters as much to exports as a coder in Bengaluru. Creative services exports rose 20 percent last fiscal, diversifying foreign exchange earnings beyond maintenance and support work. Further, the projection that the sector will require 20 lakh professionals by 2030 has to be read for what it truly is—less of a statistic and more a skilling mandate.
To meet this demand, the government is backing the Indian Institute of Creative Technologies in Mumbai to spearhead a radical educational overhaul. The plan to set up 15,000 content creator labs in secondary schools and 500 labs in colleges is a ‘Silicon Valley moment’ for the arts. By embedding digital storytelling, character design and AI-assisted animation alongside mathematics and physics, the State is legitimising creativity as a mainstream career.
This move democratises opportunity. In the orange economy, it is not geography that matters. With subsidised graphics processing unit access under the IndiaAI Mission at ₹65 per hour, a student in a tier-3 town can compete with a worker in a California studio.
While cinema historically served as India’s primary cultural export, the gaming sector has emerged as a significant economic pillar within digital services. According to government data, India’s online gaming market was valued at ₹23,200 crore in 2024 and is projected to reach ₹31,600 crore by 2027. This trajectory positions gaming as a core driver of the digital creative ecosystem, supported by a user base of nearly 50 crore participants in both urban and rural centres.
The ‘Create in India’ push aims to shift the country from consumer to creator. For years, Indian gamers played on platforms built in the West, Japan or China. By incentivising domestic development and enabling IP-backed lending, the government is encouraging developers to mine Indian mythology and contemporary narratives for global audiences. The prize is ownership of IP, not just participation in value chains.
However, the economist’s lens must also be critical. While the orange economy offers high-paying jobs, with creative roles reportedly paying 88 percent more than non-creative ones, there is a risk of a widening divide. The K-shaped recovery, that has haunted post-pandemic India, persists. The creative boom is currently concentrated in urban clusters. The challenge lies in being inclusive. The orange economy must cover the handloom weaver in Kanchipuram as much as the digital animator in Mumbai.
Generative AI adds urgency. It can lower the cost of production by 40 percent, but also threatens entry-level jobs in dubbing, basic illustration and coding. The government’s emphasis on ‘trusted AI’ and the proposed consensus on copyright is a step in the right direction. For the orange economy to thrive, the creator must be protected. If AI models can ‘scrape’ an artist’s style without compensation, the incentive to create vanishes. Without enforceable IP protection, incentives to create will erode.
Despite the optimism, structural hurdles remain such as funding gaps, regulatory maze and a lack of physical infrastructure. Creative smaller enterprises struggle for credit because banks don't know how to value a script or a game design as collateral. We need a ‘creative bank’ or a specialised IP-valuation framework. From gaming classifications to OTT censorship, the regulatory environment is often reactive. A single-window clearance for live events and a cohesive national policy for the creative audiovisual sector are overdue. Finally, digital labs are great, but the orange economy also thrives on ‘collisions’. We need creative districts—physical spaces where artists, technologists and investors can meet and exchange ideas.
The significance of the orange economy transcends GDP percentages. It is about identity. When a nation exports its imagination, it stops competing on the basis of low-cost labour and starts leading on the basis of ideas. The Budget has sketched the outline. It is the execution which will now determine whether India evolves from the world’s ‘back office’ to its ‘creative studio’, or stays put. If it succeeds, ‘Made in India’ will give way to something more powerful: ‘Imagined in India’. It’s time we put our money where our mind is.
Tulsi Jayakumar | Professor, economics, and Executive Director, Centre for Family Business and Entrepreneurship at Bhavan’s SPJIMR
(Views are personal)