Cricket World Cup expected to add $2.4 billion to India’s economy

Economists at the Bank of Baroda have estimated that the Cricket World Cup in India could boost the country’s economy by up to ₹20,000 crore ($2.4 billion). 

The matches taking place across 10 cities are expected to particularly benefit the travel and hospitality sectors as they will draw a significant number of both domestic and international crowds. Additionally, the event coincides with India’s three-month festive season starting in October, which is likely to further boost retail as consumers are likely to make “sentimental purchases of merchandise,” economists Jahnavi Prabhakar and Aditi Gupta wrote in a note on Wednesday, Bloomberg reported. 

Economists predict that the total viewership for the tournament, including television and streaming platforms, will surpass the 552 million viewers seen in 2019, potentially generating ₹10,500 crore ($1.26 billion) to ₹12,000 crore ($1.44 billion) in TV rights and sponsorship revenue “on a conservative basis”. 

Cricket, being the most popular sport in a country of 1.4 billion, attracts over $1.5 billion in sponsorship and media spending annually, representing 85% of all sports-related spending in India. 

“It’s the consumers in the world’s most populous nation who are the biggest prize, particularly for foreign brands,” said Madan Sabnavis, chief economist at Bank of Baroda.  “Cricket has less fanfare globally as compared to other sports like soccer, but the kind of frenzy you witness in India around cricket is not present elsewhere.”

Major brands such as Coca-Cola, Google Pay, and Unilever are among those paying for airtime during the World Cup. Saudi Aramco, Emirates, and Nissan will be seen throughout the World Cup as the International Cricket Council’s (ICC) official partners. Disney Star, which holds the exclusive TV broadcast rights for this year’s World Cup, has said that it is partnering with 26 sponsors including Booking.com BV and liquor company Diageo Plc.

Jehil Thakkar, a partner at Deloitte India, told Bloomberg that advertisement spending on streaming platforms during the tournament is estimated to reach about ₹2,000 crore ($240 million). A 10-second advertising slot during matches costing up to ₹3 million ($36,000), a 40% increase compared to the last World Cup in 2019.

The Cricket World Cup is also expected to drive India’s hotel and media stocks, as room rates have surged by an average of 150% on India match days. Other sectors, such as airlines and media firms, are also poised to benefit from the tournament.

However, the World Cup may lead to inflation, with surges in airline tickets and hotel rentals. The informal sector in the 10 host cities could also see substantial increases in service charges, leading to inflationary pressures. Economists estimate that inflation may rise between 0.15% and 0.25% for October and November.

Despite potential inflationary concerns, the tournament is expected to provide a boost to the Indian government’s coffers through increased tax collections on ticket sales, goods and services taxes on hotels, restaurants, and food delivery, providing additional fiscal space for the country.

The tournament kicks off with a match between England and New Zealand at Ahmedabad’s Narendra Modi Stadium on 5 October. The final will be played at the same venue on 19 November.