The Indian crypto industry is seeking parity, urging fair regulations against foreign exchanges exploiting regulatory gaps amidst dwindling market share for local exchanges while investors face legal uncertainties. With unstable banking ties hindering operations, the sector is currently grappling with hurdles.
However, India’s finance minister, Nirmala Sitharaman, refrained from providing any updates on the regulation and taxation of crypto during her interim budget address on February 1. This decision comes as India remains engaged in collaborative efforts with G20 nations, consistent with the ministry’s stance advocating for a unified global regulatory framework.
Despite no mention of the industry, key players remain confident. In a statement to CryptoPotato, Dilip Chenoy, Chairman of Bharat Web3 Association too, highlighted the repercussions of high TDS (Tax Deducted at Source) and income tax rates that have caused both creators and consumers to move out of India. This migration has significantly greatly affected the prospects of Web3 in the country.
Chenoy, however, said that industry players “weren’t expecting any big movement during the session, considering that this was a Vote-on-account budget.” However, he is keen on potential changes following the elections when the full budget is unveiled.
“We are eagerly anticipating changes to be announced post-elections when the full budget is announced, and we are optimistic concerning the state of the sector in the country.”
Sumit Gupta, Co-founder of Indian crypto exchange CoinDCX, also echoed a similar sentiment in his statement,
“While the VDA industry had hoped for tax and TDS relief, we remain optimistic that the full budget will bring positive developments, including reduced taxation and a supportive policy framework.”
Meanwhile, the government has been engaged in discussions with the Indian crypto industry and has implemented various measures in recent months to address some of their concerns.
Among these actions was the issuance of show-cause notices to offshore cryptocurrency exchanges like Binance and Kucoin in December. These notices were issued due to their non-compliance with local anti-money laundering laws and failure to register in the country.
While delivering her Interim Budget 2024 speech, Sitharaman gave a sneak peek into Prime Minister Narendra Modi’s vision for “Viksit Bharat” (developed India) by 2047. It’s essentially a vision of the government of India to transform into a developed nation by 2047, the 100th year of its independence.
Rajagopal Menon, who is currently serving as the VP of WazirX, told CryptoPotato that crypto and VDAs can be a force multiplier in this vision “by empowering individuals at the grassroots level.” He added,
“Digital public infrastructure and the PM’s aspiration for ‘Anusandhan’ (innovation) will benefit from integrating provisions for long-term financing of domestic crypto projects given how India is at a pivotal phase in the Crypto revolution. We expect these developments to factor in the government’s agenda along with our existing requests for a reduction in TDS rates to 0.01% and offset of losses for traders.”