India’s crypto sector is reportedly stepping up efforts to lobby the government for tax reforms, sensing an opportunity as officials grow more receptive to digital assets.
Industry leaders say engagement with policymakers has increased sharply this year, particularly after Donald Trump’s return to the White House and his vocal support for crypto, the Financial Times reported Tuesday.
At the heart of the industry’s demands is a rollback of steep taxes introduced in 2022. These include a 30% capital gains tax and a 1% levy on every crypto transaction, measures aimed at curbing illegal activity but which, according to a report by the Esya Centre, pushed more than 90% of Indian crypto trading offshore.
India’s Regulators Shift From Resistance to Tentative Crypto Engagement
Industry executives now argue that a 0.1% transaction tax could offer the same traceability without stifling growth.
“Thanks to Trump, the positive momentum that has happened in crypto has impacted India as well,” Ashish Singhal, co-founder of CoinSwitch, told the outlet. He noted that meetings with officials have gone from biannual events to near-weekly discussions. “Now regulators are more closely talking to us, understanding what the space is.”
India’s stance on crypto has shifted from hostility to cautious engagement. The Reserve Bank of India once likened crypto to Ponzi schemes and pushed for a banking ban in 2018, which was later overturned by the Supreme Court.
While the central bank remains skeptical, its tone has cooled. “The relationship with the RBI has gone from negative to neutral,” said Singhal. “I will still not quite call it positive yet.”
Coinbase and Binance Return as Market Eyes $15B Growth by 2035
The change in atmosphere comes as New Delhi works on redrafting a key industry discussion paper. The move was confirmed earlier this year by Ajay Seth, India’s economic affairs secretary, though no formal tax relief was included in February’s budget, drawing disappointment from the Bharat Web3 Association.
The Supreme Court of India has also weighed in, asking the Centre why it has not yet introduced “clear-cut” regulations for the sector. The court expressed concern over the government’s continued delay in forming comprehensive crypto policies.
Despite the lack of immediate relief, international exchanges are returning. Binance and Coinbase, which previously scaled back operations in India, have re-entered the market. The country’s crypto sector, currently valued at around $2.5b, is projected to grow to more than $15b by 2035, according to estimates by Grant Thornton.
Changing public perception remains a challenge. Many Indians still believe digital assets are illegal, despite the absence of a formal ban. But interest is rising among younger, tech-savvy investors, particularly those from wealthier backgrounds.
As regulation continues to evolve, industry players hope to bring more of the sector back onshore, and into the open.
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