What happened?
India’s crypto industry is increasing its efforts to lobby the government for tax reforms as officials become more receptive to digital assets. The sector’s leaders have been engaging more with policymakers, especially after Donald Trump’s return to the White House and his support for crypto. They are pushing for a rollback of steep taxes imposed in 2022, which include a 30% capital gains tax and a 1% levy on every crypto transaction, arguing that these measures have driven over 90% of Indian crypto trading offshore.
Who does this affect?
This situation affects various stakeholders in the crypto space, including investors, traders, and exchanges operating in India. The tax structure has led many Indian crypto traders to operate offshore, impacting local businesses and startups in the crypto sector. Additionally, it affects global exchanges like Binance and Coinbase, which previously scaled back operations in India but are now re-entering the market due to changes in government attitudes.
Why does this matter?
The potential tax reforms could significantly impact the crypto market in India, which is currently valued at about $2.5 billion and projected to grow to over $15 billion by 2035. Reducing the tax burden could encourage more domestic trading and attract international players back to the Indian market, fostering growth and innovation. As public perception shifts and regulation evolves, there’s potential for increased onshore activity, making India a key player in the global crypto ecosystem.