India's crypto market has seen explosive growth over the past year. According to the OECD's Asia Capital Markets Report 2026, the country recorded roughly $340 billion in crypto inflows between June 2024 and June 2025, equivalent to about 9% of its GDP. In rupee terms, that figure approaches ₹32 trillion.
No other major Asian economy came close. The report, which draws on data from blockchain analytics firm Chainalysis, shows South Korea in second place with a massive gap, followed by Vietnam and Indonesia. Chainalysis tracks inflows by analyzing on-chain value received by India-linked addresses, using IP and web traffic data for centralized exchanges and clustering methods for DeFi and transfers. This $340B figure captures trading, transfers, and DeFi volume, not net capital crossing borders.
Across the wider Asia-Pacific region, on-chain activity grew 69% year-over-year to reach $2.36 trillion. India led that growth, with strength in both small retail trades and large transactions. VPN and proxy traffic may cause slight over- or under-counts, but the overall pattern clearly positions India as Asia's crypto leader.
Heavy Taxes, Yet Users Keep Coming
India's virtual digital asset tax regime is among the toughest globally: a flat 30% tax on gains, no loss offsetting, a 1% TDS on transactions above certain thresholds, and an additional 18% GST on exchange services. Despite these hurdles, adoption has not slowed. Chainalysis ranked India first on its 2025 Crypto Adoption Index for the third straight year, with 119 million cryptocurrency users—the largest user base anywhere—spanning retail, institutional, CeFi, and DeFi.
Young users, widespread UPI mobile payments, and demand for alternative income streams drive continued participation. Even with a heavy tax bite, people keep using crypto.
Parliament Grills RBI for the First Time
On July 2, India's Lok Sabha summoned the Reserve Bank of India (RBI) for questioning on cryptocurrencies—a first. The RBI has long argued that virtual digital assets should not be allowed to operate. Parliament calling the central bank to explain itself underscores the unresolved tension.
The numbers behind this fight are stark: despite leading global adoption for three years, 73% of trading volume still flows through foreign exchanges, and more than 180 India-based crypto startups have relocated operations abroad. The government collects tax revenue from this activity but has not built a clear regulatory framework.
Three Possible Paths After the July 2 Hearing
Three scenarios emerged after the parliamentary hearing: lawmakers could build a real regulatory framework to transform India into a digital asset hub; they could ban the activity outright, pushing talent and capital overseas; or they could maintain the status quo, similar to the outcome of earlier meetings with exchanges.
Some groundwork exists. FIU-IND has registered over 54 virtual digital asset service providers under PMLA rules, with updated AML/KYC guidelines effective from January 2026. Section 509 reporting begins in April 2026, and CARF data-sharing will start in April 2027. However, experts note that no framework covers custody, stablecoins, or DeFi—the biggest gaps in India's crypto regulations today, even as user numbers keep climbing.
Public sentiment has also floated ideas: some call for a state-run crypto exchange, allowing crypto for stock purchases, or using digital assets to hedge against rupee weakness. None appear in any official plan, but they show public imagination running far ahead of policy.
This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency markets carry significant risk. Always do your own research before making any investment decisions.