India Strategically Reconsiders Crypto Policy Amid U.S. Pro-Crypto Influence

• India’s Reassessment of Crypto Regulations in Response to Global Trends
• Economic Secretary Ajay Seth on India’s Changing Crypto Stance

India reconsiders its approach to cryptocurrency regulations as global perspectives shift, particularly influenced by the United States’ growing support for digital assets under Donald Trump’s administration. 

The increasing global acceptance of digital assets, along with the U.S.’s efforts to integrate digital currencies into its financial system, is pushing India to reconsider its rigid approach. With multiple countries easing restrictions and recognizing the economic potential of digital asset, India is beginning to acknowledge that an isolated stance may not be sustainable in the long run.

India Revisits Crypto Regulations

India’s Economic Secretary Ajay said in an interview with Reuters “more than one or two jurisdictions have changed their stance towards cryptocurrency in terms of the usage, their acceptance, where they see the importance of crypto assets. In that stride, we are having a look at the discussion paper once again,”. 

In December 2023, India’s Financial Intelligence Unit (FIU) took action against international cryptocurrency exchanges, and all digital assets related companies including Binance and Kucoin, issuing show-cause notices due to their failure to adhere to local digital assets regulations. 

Even if this is just a reassessment, it’s also important to take note of the recently passed law, as India’s 2025 Budget  introduces stricter tax measures on digital assets. The India Finance Minister, Nirmala Sitharaman, introduced the tax policy during the Union Budget 2025, placing digital asset earnings under undisclosed revenue per Section 158B of the Income Tax Act. Effective from February 1, 2025, the revision may impose penalties reaching 70% on unreported crypto-related profits from previous fiscal periods.

According to the details of the budget, every related digital assets activity are now recorded as virtual assets and would face increased taxation if it’s not properly recorded as income. Hence, exchanges, intermediaries, and other designated entities must submit transaction details to the income-tax authorities. 

There are many uncertainties that lies within India’s approach to digital assets. While authorities acknowledge the rising significance of virtual currencies and aim to stay competitive as nations adopt blockchain, they also enforce strict levies and favor central bank digital currencies over decentralized finance.

The main hurdle lies in balancing oversight with progress. Excessive taxation and rigid controls might drive crypto enterprises away, yet completely prohibiting the digital assets ecosystem seems less feasible in an interconnected global market.

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