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India’s cryptocurrency industry is ramping up its lobbying efforts for tax reforms as Prime Minister Narendra Modi’s government shows signs of softening its stance on digital assets. The shift comes amid broader geopolitical currents, including the return of Donald Trump to the U.S. presidency, which has contributed to renewed optimism within the global crypto community.
According to a report by the Financial Times, crypto exchange leaders in India have noted an increase in dialogue and willingness to engage from government officials, the industry’s main request: a reduction in what they describe as “harsh” tax policies.
Read More: 2025 Crypto Tax Rules in India: Your Ultimate Guide to Compliance and Savings
Industry Demands Relief from Punitive Taxes
Indian crypto users face a 30% capital gains tax on profits from digital assets, coupled with a 1% tax deducted at source (TDS) on every transaction. These measures were introduced as part of a broader effort to control money laundering and criminal use of cryptocurrencies but have also been criticized for stifling innovation and pushing activity offshore.
Central Bank Moderates Tone
While India’s Reserve Bank (RBI) has historically maintained a skeptical view of crypto banning banking services to crypto companies in 2018 (a decision later overturned by the Supreme Court in 2020), the current leadership appears less confrontational. RBI Governor Sanjay Malhotra has steered clear of open criticism, with Singhal noting the relationship has shifted “from negative to neutral.”
This cooling of hostilities could be critical as India navigates its place in the global race for digital asset leadership. Critics have long argued that India lacks a clear, forward-looking crypto policy, leading to regulatory ambiguity that discourages investment and innovation.
Global Winds Shifting
The more favorable mood in New Delhi coincides with broader geopolitical changes. The return of the Trump administration in the United States has been associated with a more pro-crypto tone in Washington, influencing sentiment in emerging markets such as India.
Whether the Modi government will follow through with tax reforms or issue more straightforward regulatory guidelines remains to be seen. But for India’s crypto sector, the current climate may offer its best chance yet to secure a more growth-friendly framework.
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