India’s Web3 Industry Awaits Crypto Policy Clarity in Union Budget 2025

The Indian government will release the Union Budget for the 2025 fiscal year on February 1. As the date approaches, stakeholders in the Web3 and cryptocurrency sectors are urging policymakers to address regulatory ambiguities and revise tax policies. Industry leaders argue that clear guidelines and competitive taxation could position India as a leader in blockchain technology.

India’s Web3 Industry Awaits Crypto Policy Clarity in Union Budget 2025


Demand for Defined Cryptocurrency Regulations

India and the U.S. currently lack comprehensive legal frameworks for cryptocurrencies. Analysts suggest India’s extensive developer talent pool could drive blockchain advancements if supported by progressive policies.

Sathvik Vishwanath, Co-Founder of Unocoin, highlighted the urgency of aligning with global standards: “The U.S. is advancing crypto regulation. India must invest in digital infrastructure, expand blockchain research, and clarify rules for blockchain, crypto, and AI.”

Global regulatory momentum is accelerating. The U.S. SEC established a Crypto Assets Task Force to expedite legislation, while the U.K. government plans to finalize crypto regulations by 2026. India has not yet proposed a timeline for similar measures.


Tax Reforms to Retain Crypto Investments

India imposes a 30% tax on crypto earnings and a 1% Tax Deducted at Source (TDS) on transactions. Introduced in 2022, these measures have faced criticism for stifling domestic investment.

Current Crypto Tax Policies in India
Tax on Earnings30% flat rate
TDS on Transactions1% per trade
Loss OffsetNot permitted

Sonu Jain, Chief Risk Officer at 9Point Capital, noted: “High taxes have shifted investments to jurisdictions like the UAE. Reducing rates and allowing loss offsets in Budget 2025 could revive local innovation.”

Last year, India abolished the angel tax for startups, easing fundraising for new ventures. However, crypto and blockchain policies remain unaddressed in recent budgets.

Thangapandi Durai, CEO of Koinpark, emphasized the sector’s potential: “Strategic tax reforms and blockchain development could elevate India’s role in the $3 trillion crypto market.”


Budget 2025: Key Expectations

Industry stakeholders anticipate policies that balance innovation with investor protection. Priorities include:

  1. Regulatory Clarity: Guidelines for crypto exchanges, DeFi platforms, and tokenization.
  2. Tax Rationalization: Lower TDS rates and provisions to offset losses.
  3. Blockchain Adoption: Funding for research and public-sector blockchain projects.

Global examples like the EU’s MiCA framework demonstrate how regulatory certainty can attract investments. India’s budget could mirror these efforts to prevent talent and capital migration.


Balancing Innovation and Compliance

While investors seek favorable policies, concerns about fraud and market volatility persist. The government may introduce safeguards, such as mandatory KYC for crypto exchanges, to mitigate risks.


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