India is currently in the throes of its 2024 general election, a multi-phased event that is capturing the attention of not just the nation but the world. As the world’s most populated country and the fastest growing major economy, the outcomes of this election are pivotal. Yet, despite the massive socio-political shifts potentially at play, the election is unlikely to instigate immediate changes in the country’s crypto policy, which remains restrictive.
Currently, under Prime Minister Narendra Modi’s administration, India has imposed stringent controls on the cryptocurrency market. These include a 30% tax on profits from digital assets and a 1% tax deducted at source on every transaction, alongside a non-offset policy for losses. These measures have significantly curtailed the growth of the digital asset ecosystem within the country.
Prime Minister Modi, at 73, is campaigning for a third term under the banner of the Bharatiya Janata Party (BJP) and is projected to win as per pre-election surveys. His administration’s approach to cryptocurrency has been cautious at best, with a series of regulations that have created a challenging environment for crypto enterprises. The major opposition, the Indian National Congress (INC), and several regional parties have banded together under the coalition I.N.D.I.A to contest Modi’s dominance, but crypto policy remains a non-issue in their political campaigns as well.
The importance of crypto as an election issue is minimal. The overwhelming majority of the voting populace remains unacquainted with Web3 technologies, and even the hefty tax on crypto transactions has not stirred significant public debate. Other pressing issues such as unemployment, secularism versus a Hindu-nationalist agenda, and the marginalization of minorities dominate the electoral discourse, sidelining crypto discussions entirely.
Despite the lack of political focus, some industry leaders remain optimistic. Kiran Vivekananda, Chief Public Policy officer at CoinDCX, one of India’s largest cryptocurrency exchanges, expressed hope that the incoming government would engage more actively with the industry to address its challenges and protect citizen interests. Conversely, entrepreneurs like Ashish Khandelwal, founder of Anq, urge that the Indian crypto industry should take cues from the U.S. to make crypto a more significant political and policy issue.
Looking forward, regardless of the election outcomes, significant changes in crypto policies seem unlikely in the near term. The existing framework under Modi’s leadership, which includes the recent bans on off-shore exchanges, is expected to continue. Even in the less likely scenario of the opposition forming the government, other priorities are expected to overshadow any immediate shifts in crypto policy.
Nevertheless, the Indian government’s stance on crypto might see some evolution post-2024, spurred not by domestic policy but by international cooperation. Notably, under its 2023 presidency of the Group of 20, India played a significant role in framing a global policy for cryptocurrencies. This initiative indicates a potential alignment of India’s future crypto policies with global standards, especially with the scale-up and launch of the digital rupee, or eRupee.
India’s crypto policies, therefore, are poised at a critical juncture. While immediate changes may not be on the horizon, the broader landscape of digital assets in India could transform significantly in the coming years, influenced by global policy dynamics and the internal advancements of digital infrastructure under Modi’s potentially extended tenure.
