The Indian crypto industry is ramping up its lobbying efforts to reduce taxes levied on crypto trading. According to a Financial Times report published on 27 May 2025, the industry hopes to capitalise on a more open-minded attitude towards crypto from the Indian government, as the country engages in trade negotiations with the US.
Ashish Singhal, founder of CoinSwitch, a crypto exchange based in India, mentioned that exchanges with Indian policymakers have become more frequent. “We’re now meeting monthly, sometimes even weekly,” he said, unlike meeting biannually in the past.
The main request from the industry leaders remains a reduction in what Singhal described as “very harshly” imposed taxes.
The crypto industry, which faced marginalisation for the longest time due to concerns regarding its links to criminal activity, is now gaining momentum as executives from major exchanges in India reveal a notable shift in government engagement, especially after Donald Trump’s re-election and his pro-crypto stance.
BREAKING: India considering crypto policy changes
30% tax and TDS rules could be revised to match stock market regulations
Big if true! Indian #crypto traders might finally get some relief pic.twitter.com/8Qc67b8xd8
— Kiran Gadakh ( crypto.kiran ) (@kirangadakh16) February 2, 2025
Currently, crypto transactions in India are subject to a 30% capital gains tax and a 1% tax deducted at source (TDS). The government introduced these taxes in 2022 to help improve traceability and curb illegal use of this asset class.
However, as per a report by Esya Centre published in July 2024, these taxes have resulted in driving over 90% of the Indian crypto traders offshore.
Singhal proposed that a lower transaction tax of 0.1% could ensure traceability without stifling the market.
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Trump’s Pro-Crypto Policy is Influencing the Indian Stance Indirectly
Coinbase, which recently re-entered India, sees Trump’s presidency and pro-crypto stance boosting crypto momentum globally.
Tom Duff Gordon, the company’s vice president of international policy, said that the government of India realises that it cannot realistically achieve an outright ban on crypto.
He explained, “While tax cuts aren’t our immediate priority, we believe a balanced policy could grow the tax base and help repatriate offshore trading activity.”
Platforms like Coinbase and Binance, which recently reopened in India, are eyeing the Indian crypto market, expecting it to grow from $2.5 billion in 2024 to over $15 billion by 2035, based on an analysis by the accounting firm Grant Thornton.
Grant Thornton partner Kush Wadhwa further explained that, “India can’t ignore crypto, but the government’s concerns remain around tax evasion and money laundering. It’s not a ban; they just want better control.”
Despite the perceived advances, the crypto lobby in India remains disappointed. The Bharat Web3 Association condemned the lack of tax relief for digital assets when the February budget was announced, and the CEO of the Bangalore-based cryptocurrency exchange Mudrex, Edu Patel, called the tax regime a deal breaker.
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Reserve Bank of India Remains Cautious
Historically, the Reserve Bank of India (RBI) has been the strongest opponent of the crypto industry, with a deputy governor likening crypto to Ponzi schemes in 2022. The RBI had even banned banks from servicing crypto firms, which was later reversed by the Supreme Court.
The RBI had suggested in December last year that the crypto industry posed a risk to the financial stability of the country, but since then has softened its stance.
The new RBI governor, Sanjay Mishra, has refrained from directly criticising the crypto industry, stating that the central bank is awaiting the government’s updated policy paper.
Changing public perception remains a hurdle. Suril Desai, who leads the technologies team at Nishith Desai Associates, a law firm that fought the RBI’s attempt to ban crypto, said, “Many Indians still believe crypto is illegal.”
However, there is a strong interest among young Indians to invest in digital assets.
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Key Takeaways
- High taxes have resulted in driving over 90% of the Indian crypto traders offshore
- The Indian crypto market is set to grow from $2.5 billion in 2024 to over $15 billion by 2035
- Many Indins still do not trust crypto, thinking that the asset clas is illegal
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