Key Notes
- Prime Minister Narendra Modi’s government is becoming more receptive to the crypto industry’s concerns following Trump’s inauguration.
- India’s crypto market, projected to grow from $2.5 billion in 2024 to $15 billion by 2035, is drawing interest from global players like Coinbase and Binance.
- Despite these challenges, investors and industry groups are pushing for favorable crypto tax reforms to spur growth and stability in the sector.
India’s crypto industry is now actively lobbying to reduce the crypto tax burden on investors, which has crippled domestic trading to a great extent. The industry group is now citing measures undertaken by the Trump administration with a more crypto-friendly approach. Furthermore, they noted that India’s crypto space has the potential to grow from a $2.5 billion industry to $15 billion by 2035.
Indian lawmakers have downplayed the crypto market for a long time, citing concerns surrounding criminal activities, illicit funding, etc. However, sources familiar with the matter said that Prime Minister Narendra Modi’s government is becoming more receptive to the concerns of India’s crypto industry, and has been looking forward optimistically ever since Donald Trump came to power.
India’s Crypto Industry Group Has Frequent Discussions With Policymakers
Ashish Singhal, co-founder of CoinSwitch crypto exchange, cited a positive shift among lawmakers. He added that the crypto industry stakeholders now engage with policymakers on a “monthly, if not weekly,” in comparison to the biannual frequency seen earlier.
“Thanks to Trump, the positive momentum that has happened in crypto has impacted India as well. Now regulators are more closely talking to us, understanding what the space is,” Singhal told the Financial Times.
The primary request from the industry, according to Singhal, is for a reduction in what he described as “very harsh” taxes. These include a 30% capital gains tax and a 1% levy on every crypto transaction, measures introduced in 2022. These stringent requirements have already driven more than 90% of Indian crypto traders to offshore destinations.
Following Trump’s inauguration in January, India’s economic affairs secretary, Ajay Seth, announced plans to revise a critical industry discussion paper intended to guide the country’s crypto policy.
Coinbase, Binance Renter India’s Crypto Space
Some of the top foreign crypto firms like Coinbase and Binance are now willing to enter India’s crypto space. These big players are now vying for a share of India’s rapidly expanding crypto market, which is projected to grow from $2.5 billion in 2024 to over $15 billion by 2035, according to estimates from accountancy firm Grant Thornton. Kush Wadhwa, partner at Grant Thornton’s Indian arm, said:
“Competition has definitely started heating up.“India doesn’t have any option but to adopt it, but the problem for them is money laundering and tax evasion — they’re not saying ‘don’t do it’, but they want a control on it.”
India’s crypto investors faced tough times last year with the $230 million hack of crypto exchange WazirX, exposing security cracks. On top of it, the 30% crypto taxes have also caused investors to bleed money heavily. The investors are now demanding favourable crypto tax reforms moving ahead.
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