India’s Crypto Sector Pushes for Tax Cuts: Report

Highlights:

• India’s crypto industry urges tax reform as government grows open to digital assets.
• Leaders propose a 0.1% tax to replace high 2022 rates and boost growth.
• RBI softens its stance, signaling cooperation as exchanges return and the market expands.

India’s crypto industry is ramping up efforts to seek tax changes as the government shows increasing interest in digital assets. According to a Tuesday report from the Financial Times, industry insiders note a sharp rise in dialogue with policymakers this year. The momentum has reportedly picked up following Donald Trump’s re-election and his strong pro-crypto stance, which some believe is influencing global regulatory attitudes.

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India’s crypto industry pushes for tax cuts as New Delhi warms to former pariah sector https://t.co/SoNaVywGfp

— Financial Times (@FT) May 27, 2025

Senior leaders from India’s top crypto exchanges say the Modi administration is showing a greater willingness to engage in ongoing discussions. The digital asset sector is pushing to eliminate the heavy tax burdens introduced in 2022, which include a 30% levy on capital gains and a 1% tax on each crypto transaction. These measures were initially designed to combat illicit financial activity. However, according to data from the Esya Centre, these policies have driven over 90% of Indian crypto trading to overseas platforms. Industry leaders believe a lower 0.1% tax can track crypto use without hurting the sector’s growth.

Regulators Increase Engagement Amid Crypto Industry Push

Co-founder of CoinSwitch, Ashish Singhal, said Trump’s support has indirectly influenced positive changes in India’s crypto scene. He stressed that interactions with government officials have increased significantly, shifting from a few times a year to almost weekly.

According to him, regulators are now paying closer attention and gaining a better understanding of the cryptocurrency sector. Following Trump’s inauguration in January, reports suggested that India’s Economic Affairs Secretary, Ajay Seth, could update an important crypto policy document. However, when the Union Budget was released in February, it did not include any tax relief for digital assets. This outcome was labeled “disappointing” by the Bharat Web3 Association.

India’s cryptocurrency sector has faced ongoing regulatory challenges for years. In 2018, the Reserve Bank of India (RBI) banned banks from providing services to crypto businesses. However, this restriction was lifted in 2020 when the Supreme Court ruled against the RBI’s ban, reopening opportunities for the industry.

Today, the Reserve Bank of India speaks in a softer tone. While still worried about the risks digital assets might bring to the financial system, Governor Sanjay Malhotra avoids the strong warnings of past leaders. Singhal noted that the RBI no longer holds a negative view and now takes a more neutral position.

Major Crypto Exchanges Return as Market Targets $15B by 2035

Even though there’s no tax relief right now, big international crypto companies like Binance and Coinbase are coming back to India. The country’s crypto market is worth about $2.5 billion today and is expected to grow to over $15 billion by 2035, according to Grant Thornton. Many Indians still view crypto as illegal, but interest is growing among young, wealthy investors. The industry hopes clearer rules will bring more activity back into the country. 

Tom Duff Gordon, Coinbase’s vice president for international policy, said that taxes aren’t the main concern right now, but there is good long-term potential. “There may be a win-win where the government sees an opportunity to increase the tax base and to onshore some of that offshore activity,” he said.

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