India Faces Risk of Losing Its Crypto Economy Without Clear VDA Regulation
India's contradictory approach to cryptocurrency regulation is driving investment and trading volume offshore, according to Raghav Chadha, a member of the upper house of parliament. Virtual digital assets (VDAs) face a 30% capital gains tax and 1% tax deducted at source, yet lack formal legal recognition or investor protections.
Nearly 12 crore Indians now invest through overseas platforms, with an estimated ₹4.8 lakh crore in VDA trading volume leaving domestic markets. Foreign exchanges handle 73% of India's crypto trading volume, while approximately 180 local startups have relocated abroad due to regulatory uncertainty.