Orange Economy in Union Budget 2026: Creative Industries as India’s Growth Engine

Union Budget 2026 prioritised the Orange Economy through targeted support for digital content, design education, and heritage tourism, signalling its transition from a niche sector to a core growth pillar of India’s economy.

About the Orange Economy

• Origin and Symbolism: The term Orange Economy was originally coined by Iván Duque Márquez (former President of Colombia) and Felipe Buitrago in their 2013 publication.
  The specific choice of the color orange is rooted in its historical association across many global traditions with culture, identity, and creativity.
• Concept and Economic Scope: This model refers to a broad range of interconnected activities where original ideas are transformed into cultural goods and services.
  • The primary driver of value in this sector is Intellectual Property (IP) rights. Its scope is twofold:
    • Cultural Economy: Focuses on heritage sites, visual arts, and traditional festivals.
    • Creative Industries: Encompasses more commercial sectors such as fashion, architecture, digital advertising, and gaming.
• Growth Model and Evolution: The Orange Economy represents an idea-driven growth model that aligns closely with the Knowledge Economy and Experience Economy.
  • In these frameworks, intangible assets—specifically creativity, storytelling, and intellectual property—are used to generate scalable economic value.
  • While the Cultural Economy remains centered on heritage and arts, the broader Creative Economy extends value creation into design, digital media, and experience-based services.
• Modern Integration: A significant and growing share of this creative output is now produced through gig-based and platform-mediated work.
  • This shift effectively links the Orange Economy with the Digital Gig Economy, allowing for global distribution of creative services.

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Key Highlights from Budget 2026 for Orange Economy

The Union Budget 2026 introduced several structural and digital interventions designed to scale this creative ecosystem:

• AVGC Content Creator Labs: The government proposes to establish specialized labs for Animation, Visual Effects, Gaming, and Comics (AVGC) in 15,000 secondary schools and 500 colleges to nurture talent at the grassroots level.
  • It is projected to need 2 million professionals by 2030.
• National Institute of Design (NID) Expansion: A new National Institute of Design will be established in the eastern region of India through a “challenge route” to decentralize design education.
• Support for Creative Technologies: Financial and structural support will be provided to the Indian Institute of Creative Technologies (IICT) in Mumbai to lead the transition into high-tech creative exports.
• Heritage and Cultural Tourism: Fifteen major archaeological sites—including Lothal, Dholavira, and Sarnath—will be developed into Vibrant Experiential Cultural Destinations.
• AI Integration in Creative Industries: The Budget emphasizes the convergence of Artificial Intelligence with creative content creation, supporting development of AI-native tools for animation, gaming, visual effects, and immersive storytelling to enhance global competitiveness.
• Yuva & Nari Shakti in Creative Economy: Special focus on empowering youth and women in creative professions through targeted skilling, incubation, and entrepreneurial support under the Orange Economy framework.
• WAVES – Global Positioning: Continued push for World Audio Visual & Entertainment Summit (WAVES) to establish India as a major global hub for creative content production and export.

Current Status of India’s Creative Landscape

• Industry Valuation: The creative economy in India is currently valued at approximately $25–35 billion (media & entertainment segments), and is projected to reach $100 billion by 2030–32.
• Globally, the creative economy is estimated to generate an annual revenue of more than $2 trillion and generate nearly 50 million jobs.
• Employment: The sector directly and indirectly employs millions, with creative occupations accounting for a substantial share of the workforce; the broader media & entertainment industry supports nearly 50 million jobs (including indirect employment), while core creative industries employ several million professionals.
• Segment Growth: According to the FICCI-EY Media & Entertainment Report 2025 and Economic Survey 2025-26, the Online Gaming sector generated revenue of ₹232 billion in 2024, while the Animation, Visual Effects and Post-production industry reached ₹103 billion.
• Export Strength: Creative services exports registered a strong growth of 20% in 2023-24, earning India more than $11 billion in foreign exchange.
• Regional, Informal, and Traditional Economy Dimension: For inclusive growth, the Orange Economy must integrate India’s informal and regional creative ecosystems:
  • Traditional and Folk Artists: Tribal art forms, folk performers, and craftsmen form the foundational layer of India’s cultural economy.
  • SHGs and MSMEs: Strengthening market access for handicrafts, handlooms, and GI-tagged products through digital platforms can formalize livelihoods.
  • Urban Concentration Risk: Without targeted policy support, creative growth may remain metropolitan-centric, excluding rural and semi-urban regions.

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Significance of the Orange Economy for India

• Economic Engines and the Multiplier Effect:
  • Massive Employment Potential: The Animation, Visual Effects, Gaming, and Comics (AVGC) sector is a primary growth engine, projected to require two million trained professionals by 2030.
  • The Multiplier Effect: Every direct job in AVGC generates 2–3 indirect jobs in related fields like technology, digital marketing, and event management.
  • The “Concert Economy” & Spillovers: Large-scale events—from the Jaipur Literature Festival (contributing ₹100 crore locally) to tours like “Dil-Luminati”—act as massive revenue drivers for the aviation, hospitality, and retail sectors.
  • Export Leadership: Creative services are diversifying India’s services export basket, reducing traditional reliance on IT and business process outsourcing.
• Strategic Evolution- From Service to Ownership:
  • Value Retention: Moving away from being a “back-office” for Hollywood VFX allows Indian creators to retain long-term royalties and global branding rights.
  • Innovation and Smart Power: This sector serves as the foundation for the broader Innovation Sector, enhancing India’s global influence through “Smart Power” and cultural diplomacy.
  • Tourism Integration: Highlighting cultural festivals and heritage increases the duration of stay and spending by international tourists.
• Democratization and Rural Empowerment:
  • Bridging the Urban-Rural Divide: The digital creator economy allows talent in Tier-2 and Tier-3 cities to monetize local languages and traditions globally without the need for migration.
  • Artisanal Exports: By integrating Geographical Indication (GI) tagged products (e.g., Channapatna toys or Madhubani art) into global supply chains, traditional crafts are transformed into high-value “Cultural Exports.”
  • Linguistic Edge: India’s mobile-first population and linguistic diversity provide a unique competitive advantage in creating multilingual vernacular content.
• Policy and Constitutional Framework:
  • Constitutional Basis: Articles 29 and 30 safeguard cultural diversity, providing a normative foundation for state support of creative expression.
  • Education for the Future: The National Education Policy (NEP) 2020 emphasizes design thinking and vocational exposure, aligning skills with the needs of the creative industries.
  • National Synergies: The sector thrives at the intersection of Digital India, Skill India, and Startup India, creating a unified ecosystem for growth.

Challenges to the Growth of the Orange Economy

• Financial and Structural Barriers: The creative sector often struggles to fit into traditional industrial molds, leading to a “fiscal step-motherly” treatment.
  • Incentive Disparity: Unlike manufacturing or IT, the creative sector has historically received fewer fiscal incentives and tax breaks.
  • Financing Gestation Gaps: Projects in Animation and Gaming have long development cycles and lack physical collateral, making traditional bank loans nearly impossible to secure.
  • High GST Burden: The 28% GST on real-money gaming has significantly slowed transaction volumes and dampened investor sentiment in the gaming sub-sector.
  • Regulatory Complexity: The absence of a Single-Window Clearance system for events and filming leads to bureaucratic delays that discourage large-scale international productions.
• Market Volatility and “The Platform Trap”: While digital platforms provide reach, they also create a new form of vulnerability for creators.
  • Market Concentration and Unequal Value Distribution: Revenue is heavily concentrated at the top. A small fraction of creators earns the bulk of the profit, leaving the “creative middle class” in a state of financial insecurity.
  • Platform Dependency: Creators are at the mercy of global algorithms. A single policy change or “shadowban” can instantly disrupt a livelihood.
  • Algorithmic Visibility Bias: Algorithms often favor mainstream content, frequently disadvantaging regional and vernacular creators who lack the scale to trigger global trends.
• Talent and Global Competition: India is in a race against time to bridge the gap between “quantity” and “quality” in its workforce.
  • Talent Shortage: There is a persistent lack of professionally trained designers and technical artists capable of meeting the high-fidelity standards required by global studios.
  • Regional & Gender Imbalances: High-quality creative education is concentrated in metros, and women remain significantly underrepresented in technical roles within the AVGC sector.
  • Global Outsourcing Competition: Countries like the Philippines, Canada, and China offer stiff competition with established studio ecosystems and aggressive cost advantages.
• IP Protection and Data Gaps: Without security and measurement, the sector remains “invisible” in national accounting.
  • Weak Piracy Enforcement: Inadequate copyright enforcement and widespread digital piracy continue to erode the revenue potential of Indian studios.
  • Measurement and Data Gaps: India lacks a Creative Economy Satellite Account. Without dedicated data, the sector’s contribution to GDP is consistently underestimated.
  • Fragmented Oversight: Responsibility for the creative economy is split across multiple ministries, leading to a lack of cohesive policy coordination.

India’s Initiatives Taken

• Institutional & Educational Transformation:
  • All India Initiative on Creative Economy (AIICE): Launched in 2024, this initiative serves as a unified platform to elevate India’s $30 billion creative industry, focusing on formalizing the workforce and establishing India as a global creative hub.
  • AVGC Content Creator Labs: Under Budget 2026, the government earmarked ₹250 crore to establish these labs in 15,000 secondary schools and 500 colleges.
    • Led by the Indian Institute of Creative Technologies (IICT), Mumbai, this initiative integrates real-world tools into the school curriculum.
  • National Institute of Design (NID) Expansion: To address the talent shortage, a new NID is being established in Eastern India, focusing on regional development through design education.
• Digital & Financial Infrastructure:
  • National Creative Fund (NCF): A specialized fund designed to provide seed capital for “High-Risk, High-Creativity” startups, bridging the gap left by traditional venture capital.
  • Immersive Heritage Tourism: The development of 15 archaeological sites (e.g., Lothal, RakhiGarhi, and Leh Palace) into “experiential destinations” using Immersive Storytelling Technologies and specialized Conservation Labs.
  • National Destination Digital Knowledge Grid: A new digital ecosystem created to document cultural and spiritual sites, generating jobs for local historians, researchers, and digital content creators.

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Way Forward

• Structural Reforms and Ease of Doing Business: To scale the creative sector, India is addressing the bureaucratic “friction” that has historically hampered live events and digital productions.
  • Single-Window Clearance: The Ministry of Information and Broadcasting is operationalizing a unified portal for Live Entertainment Permissions.
    • This aims to reduce the current 10–15 separate clearances required for events to a single, streamlined process.
  • Creative SEZs and Clusters: Specialized AVGC-XR clusters are being strengthened in cities like Mumbai, Bengaluru, Hyderabad, and Pune.
    • These hubs provide shared access to high-end rendering hardware, reducing the capital expenditure for small studios.
  • Operationalizing “Create in India”: Following the “Make in India” model, a dedicated Export Branding Strategy is being used to position Indian cultural festivals and digital content as premium global services.
• Financial Innovation and IP Ownership: The focus is shifting from “work-for-hire” (outsourcing) to building and owning Intellectual Property (IP).
  • IP-Backed Financing: The government is collaborating with financial institutions to promote IP-backed lending.
    • This allows creative MSMEs to use intangible assets (patents, copyrights, trademarks) as collateral for loans, solving the “lack of physical assets” problem.
  • National Creative Fund (NCF): This specialized fund provides seed capital for high-risk creative ventures that traditional VCs often overlook, ensuring that original Indian stories and games receive early-stage backing.
  • IPR Education: Through Intellectual Property Facilitation Centres (IPFCs), creators are being trained to monetize their work globally, moving beyond one-time fees to long-term royalty models.
• Formalizing the Creative Workforce: The “gig” nature of creative work is being brought into the formal economy to provide stability.
  • Social Security for Freelancers: Creative gig workers are being registered on the e-Shram portal, granting them access to Ayushman Bharat (AB-PMJAY) healthcare and accident insurance.
  • Talent Pipeline (IICT & AVGC Labs): As announced in Budget 2026, the Indian Institute of Creative Technologies (IICT) is setting up AVGC Content Creator Labs in 15,000 schools and 500 colleges. This integrates design and animation into mainstream education.
• Strategic Export and “Smart Power”: India is now treating its culture as a strategic asset, similar to its IT revolution.
  • Creative Export Policy: A dedicated framework is being formulated to treat music, cinema, and gaming as Strategic Service Exports.
  • The Concert Economy Multiplier: The government is opening select heritage monuments for live cultural events and easing visa/forex permissions for international artists to make India a global “concert destination.”
  • Monitoring & Outcome Framework: To ensure accountability, the government is establishing metrics to track creative exports as a percentage of total services and India’s growing market share in the global AVGC-XR landscape.

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Conclusion

The Union Budget 2026’s emphasis on the Orange Economy signals a paradigm shift in valuing India’s cultural assets. By integrating technology, design, and heritage, it positions India as a global creative hub, making idea-driven value creation as critical to GDP growth as manufacturing and services by 2030.

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