Bitcoin News Today: India Maintains 30% Crypto Tax, Rejects Bitcoin ETFs as Market Faces Growth Headwinds

India’s Ministry of Finance has reaffirmed its firm stance on cryptocurrency regulation, stating no immediate revisions to the 30% tax on crypto profits or approval of Bitcoin and crypto Exchange-Traded Funds (ETFs). The decision, confirmed through official communications and social media posts, maintains the tax framework established in the 2022 Union Budget, which classifies cryptocurrencies as “Virtual Digital Assets” and imposes a flat 30% tax on gains alongside a 1% Transaction Digital Asset (TDA) tax for trades exceeding INR 10,000 [1]. This policy has drawn criticism for stifling innovation and driving activity to offshore platforms, particularly as global markets, such as the U.S., have moved toward institutional adoption.

The Ministry’s position contrasts sharply with international trends, where regulatory clarity and structured frameworks are fostering growth. For instance, the U.S. approval of Bitcoin ETFs in 2024 coincided with Bitcoin surpassing the $100,000 milestone, signaling broader market confidence [1]. India’s reluctance to follow suit risks alienating a segment of its population that has rapidly adopted crypto, with the nation ranking third globally in crypto adoption in 2023, according to Chainalysis, and recording $2.1 billion in transaction volume. Analysts warn that the lack of ETFs and tax relief may push talent and capital overseas, undermining India’s potential to leverage crypto for economic growth [1].

The government’s cautious approach reflects broader concerns about financial stability and capital controls. Finance Minister Nirmala Sitharaman, who has shaped eight consecutive budgets since 2019, has emphasized regulatory caution amid the volatile nature of crypto markets. Critics argue this stance prioritizes short-term revenue over long-term innovation, with some labeling it “shortsighted” for neglecting opportunities to integrate crypto into India’s financial system [1]. The absence of a unified legal framework has left the sector in a regulatory gray area, despite growing demand from investors and entrepreneurs.

India’s $6.4 billion crypto market is projected to face headwinds without policy adjustments. Statista estimates the market could reach this valuation by 2025, yet stringent controls and limited institutional investment vehicles hinder growth. The International Monetary Fund’s 2022 Working Paper highlighted crypto’s potential to enhance financial inclusion, a benefit yet to materialize in India due to its restrictive approach [1]. Meanwhile, nations like Bhutan have actively used crypto for economic development, further emphasizing the strategic disadvantage India faces.

The Ministry’s decision appears to prioritize fiscal discipline over strategic positioning, avoiding the political and administrative complexities of designing a new regulatory framework. However, this inertia risks ceding ground to global competitors integrating crypto into their financial systems. Delayed approval for ETFs aligns with a pattern of regulatory hesitation in India’s fintech sector, leaving investors and industry stakeholders navigating an uncertain landscape. Without meaningful reforms, the country may miss opportunities to capitalize on the digital asset revolution, as its citizens increasingly seek alternatives in less regulated jurisdictions.

[1] Wise Advice (@wiseadvicesumit), X

[2] "Crypto Regulation India Delay Raises Concerns Amid..." HOKANEWS.COM, July 16, 2025