Budget 2025: India’s Crypto and Web3 Ecosystems Await Their Moment

Budget 2025: India’s Crypto and Web3 Ecosystems Await Their Moment

SUMMARY

The government must recognise the strategic importance of emerging technologies like AI, Web3, and blockchain and create an enabling environment for their growth

As an entrepreneur deeply invested in India’s growth story and the crypto ecosystem, I find several announcements from the Union Budget 2025-26 not just encouraging but transformative, particularly those that align with the vision of “Make for India, Make for the World.”

The budget’s focus on innovation, technology, and startups reflects a clear understanding of the role these sectors play in driving India’s journey toward a $10 Tn economy.

The highlight of this year’s budget is undoubtedly the increase in the income tax exemption limit to INR 12 Lakh, a move that will provide significant relief to the middle class and boost disposable income. Equally commendable is the budget’s focus on four core segments—women, the poor, youth, and farmers. India’s growth story will only be complete when every section of society benefits, and this budget takes meaningful steps in that direction.

Another significant announcement is the formation of a committee to improve the ease of doing business, aimed at streamlining regulations, improving efficiency, and attracting investments. For entrepreneurs like myself, this is a welcome move. A simplified regulatory framework will not only reduce the compliance burden but also foster a more conducive environment for innovation and growth.

Startups Driving Economic Transformation

The new Fund of Funds for Startups, with an additional INR 10,000 Cr contribution, is a significant step forward in fostering entrepreneurship in India.

As an entrepreneur who has navigated the complexities of raising funds for CoinDCX, I deeply understand how crucial access to capital is for turning ideas into reality. A brilliant business idea remains just that—an idea—unless it is backed by the necessary funding to bring it to life.

Today, India is home to over 150,000 startups, collectively raising $155 Bn in funding by 2024—a remarkable leap from just $2 Bn in 2016. This initiative will help propel more businesses towards success, reinforcing India’s position as a global hub for innovation and entrepreneurship. The fact that 48% of startups now originate from Tier II and III cities, a testament to the democratisation of entrepreneurship in India.

Policy boosts like the removal of the angel tax in the previous budget and the launch of the Fund of Funds for Startups (FFS) scheme in 2016 have played a pivotal role in this growth. The new fund will undoubtedly empower the next generation of entrepreneurs to dream bigger, build solutions that address India’s unique challenges, and compete on the global stage.

Laying The Foundation For The AI Future

The budget’s emphasis on artificial intelligence (AI) is another step in the right direction. The announcement of three Centres of Excellence for AI in education, backed by an outlay of INR 500 Cr, signals a recognition of AI’s transformative potential. AI is not just a buzzword; it is a critical enabler of India’s digital future. By investing in AI research and education, we are laying the foundation for a workforce that can harness this technology to solve real-world problems, from healthcare to agriculture.

The Elephant In The Room: Crypto At The Budget

Unfortunately, there was no relief for the crypto industry in the recent budget. The sector had hoped for amendments, particularly in creating parity between tax-compliant VASPs and non-compliant offshore exchanges.

Despite providing ample justifications around the ambiguity in Section 194S, the government has overlooked the concerns of Indian wealth shifting offshore, resulting in a significant loss of crores in tax revenue. As a compliant company, we are disappointed by the lack of recognition of these challenges.

The current tax regime—1% TDS, 30% tax on crypto gains, and no provision to offset losses—continues to stifle growth and push users toward unregulated platforms. This not only undermines investor protection but also results in lost tax revenue for the government.

A reduction in TDS to 0.01% and the ability to offset losses would have been game-changing for the industry. While we understand the need for caution, the lack of regulatory clarity is holding back an entire sector that could otherwise contribute significantly to India’s digital economy.

In addition, there are some provisions in the budget aimed at achieving individual tax compliance for VDA investors, though this could likely mean more compliance burdens on already compliant domestic exchanges. These provisions fall short of the meaningful changes the sector desperately needs.

Countries around the world are embracing Web3 and blockchain with thoughtful regulations, and India risks falling behind if decisive action is not taken soon. The silence in this year’s budget is disheartening, but it also serves as a reminder of the urgent need for dialogue and collaboration between the government and the industry.

The Way Forward

India’s ambition to become a $30 Tn economy by 2047 hinges on its ability to harness the power of technology and innovation. While Budget 2025 takes some positive steps, there is still much work to be done. The government must recognise the strategic importance of emerging technologies like AI, Web3, and blockchain and create an enabling environment for their growth.

As an industry, we remain committed to working constructively with policymakers to address these challenges. The potential of Web3 and blockchain to drive innovation, financial inclusion, and economic growth is too significant to ignore.

It is my hope that the government will soon take meaningful steps toward a progressive regulatory framework that unlocks this potential and positions India as a global leader in the digital economy.

In the words of our Prime Minister, “Make for India, Make for the World.” this vision should be extended to every corner of our innovation ecosystem, including the transformative world of Web3 and blockchain.

Note: The views and opinions expressed are solely those of the author and does not necessarily reflect the views held by Inc42, its creators or employees. Inc42 is not responsible for the accuracy of any of the information supplied by guest bloggers.

You have reached your limit of free stories
Become A Startup Insider With Inc42 Plus

Join our exclusive community of 10,000+ founders, investors & operators and stay ahead in india's startup & business economy.

2 YEAR PLAN
₹19999
₹7999
₹333/Month
UNLOCK 60% OFF
Cancel Anytime
1 YEAR PLAN
₹9999
₹4999
₹416/Month
UNLOCK 50% OFF
Cancel Anytime
Already A Member?
Discover Startups & Business Models

Unleash your potential by exploring unlimited articles, trackers, and playbooks. Identify the hottest startup deals, supercharge your innovation projects, and stay updated with expert curation.

Budget 2025: India’s Crypto and Web3 Ecosystems Await Their Moment-Inc42 Media
How-To’s on Starting & Scaling Up

Empower yourself with comprehensive playbooks, expert analysis, and invaluable insights. Learn to validate ideas, acquire customers, secure funding, and navigate the journey to startup success.

Budget 2025: India’s Crypto and Web3 Ecosystems Await Their Moment-Inc42 Media
Identify Trends & New Markets

Access 75+ in-depth reports on frontier industries. Gain exclusive market intelligence, understand market landscapes, and decode emerging trends to make informed decisions.

Budget 2025: India’s Crypto and Web3 Ecosystems Await Their Moment-Inc42 Media
Track & Decode the Investment Landscape

Stay ahead with startup and funding trackers. Analyse investment strategies, profile successful investors, and keep track of upcoming funds, accelerators, and more.

Budget 2025: India’s Crypto and Web3 Ecosystems Await Their Moment-Inc42 Media
Budget 2025: India’s Crypto and Web3 Ecosystems Await Their Moment-Inc42 Media
You’re in Good company