India Reconsiders Crypto Stance Amid Global Shift

India is reconsidering its stance on cryptocurrencies, signaling a potential shift in policy as international attitudes toward digital assets become more favorable. According to a Reuters report, the Indian government is reviewing its regulatory approach to cryptocurrencies, acknowledging that several jurisdictions have adjusted their stance on the sector. This move suggests a willingness to explore more adaptive policies that could allow the crypto sector to thrive.

Ajay Seth, India’s Economic Affairs Secretary, acknowledged that the government is reassessing its crypto policies in light of changing global trends. He noted that more than one or two jurisdictions have changed their stance on cryptocurrencies, prompting India to reevaluate its own approach. Seth emphasized that cryptocurrencies do not recognize borders, making it impractical for India to adopt a unilateral stance on the issue.

Meanwhile, India's Budget 2025 introduces stricter tax measures on digital assets. Cryptocurrencies are now classified as virtual digital assets and subjected to higher tax rates if they aren't disclosed as income. Effective February 2025, the revised tax policy imposes a 70% penalty on undeclared crypto gains and retroactively applies them to the past four years. By April 2026, businesses involved in crypto transactions must report all dealings to tax authorities, increasing the compliance requirements across the sector.

Industry experts have warned that these rigid tax policies could drive crypto traders toward underground markets or offshore platforms, making regulatory oversight more challenging. Sumit Gupta, the CEO of Indian crypto exchange CoinDCX, criticized the tax framework, arguing that a 0.01% TDS rate and the ability to offset trading losses would have encouraged compliance while boosting government revenues. He cautioned that India risks falling behind in the rapidly evolving blockchain economy without a more balanced regulatory approach.

Despite the government's cautious stance, major domestic corporations like Jio Platforms are embracing blockchain technology. Jio Platforms recently introduced JioCoin on the Polygon (POL) network, highlighting the growing interest in digital assets among Indian investors. However, the future of India's cryptocurrency industry will depend on whether policymakers embrace a more progressive framework or continue down the path of heavy-handed regulation.