The crypto industry in India is seizing a moment of opportunity, as New Delhi appears to be softening its stance towards digital currencies. This shift, reportedly influenced by the geopolitical ripple effects of Donald Trump’s return to the White House, has set the stage for a push by Indian crypto exchanges to lobby for more lenient tax policies.
A Shift in Attitude
Cryptocurrency executives in India have noted a discernible change in the government’s approach, according to a recent Financial Times report. This new receptiveness, attributed in part to global political dynamics, is giving the crypto sector a glimmer of hope for regulatory relief. “Thanks to Trump, the positive momentum that has happened in crypto has impacted India as well,” remarked Ashish Singhal, co-founder of the popular crypto exchange CoinSwitch. The industry’s main plea? A reduction in what Singhal describes as “very harshly” imposed taxes.
Currently, crypto enthusiasts in India face a formidable 30% capital gains tax on their transactions, alongside a 1% levy on every trade. These measures, according to authorities, are designed to curb illicit activities associated with digital assets. Yet, as the dialogue between the government and the crypto industry unfolds, there seems to be an opening for reconsideration. This mirrors the broader global trend of regulatory discussions, as seen in the U.S. Congress’s upcoming debates on crypto legislation.
Historical Hurdles
The Indian crypto market has had its fair share of hurdles. Back in 2018, the Reserve Bank of India (RBI) issued a ban preventing banks from offering services to crypto companies. This decision, however, was overturned by a Supreme Court ruling in 2020, which reinstated banking access for crypto businesses. The current RBI governor, Sanjay Malhotra, has adopted a more measured tone compared to his predecessors. While not openly endorsing cryptocurrency, Malhotra’s stance has been described by Singhal as shifting “from negative to neutral.”
This evolving regulatory environment is essential for a market that has been in flux. The interest in digital assets continues to grow among India’s tech-savvy population, who are keen to participate in what many see as the financial systems of the future. The UK’s Financial Conduct Authority is also actively seeking public and industry views on crypto regulation, as detailed in our recent coverage.
The Road Ahead
The potential for tax reform comes at a crucial time for India’s burgeoning crypto sector. While the government appears more open to discussions, the path towards regulatory clarity remains fraught with challenges. Critics point out that the lack of a comprehensive crypto policy creates uncertainty, which could stifle innovation and investment.
Will the Indian government heed the industry’s calls for tax relief? That’s the billion-dollar question. While the dialogue is promising, the specifics of any regulatory adjustments remain to be seen. Market participants are cautiously optimistic but aware that change in this space often comes at a snail’s pace.
As the government weighs its options, there’s a palpable sense of anticipation. If India were to relax its tax regime on crypto transactions, it could unlock significant growth potential for the sector, potentially positioning the country as a leader in the global digital economy. On the other hand, stringent regulations could drive innovation elsewhere, leaving India on the sidelines of a rapidly evolving financial landscape.
The coming months will be pivotal. As conversations continue, stakeholders across the board are eager to see if India’s crypto policy will evolve to match the dynamic nature of the industry it seeks to regulate.
Source
This article is based on: India’s Crypto Industry Lobbies for Tax Cuts as Government Eyes Softening Stance: FT
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
