Author: Tiger Research
Translated by: Felix, PANews
TL;DR
- Key Development Region for Web3 Projects: India, with 1.4 billion people (median age 28), 9.75 million developers, over 1,200 projects, and $3 billion in investments, provides the best conditions for achieving Web3 ecosystem development
- Regulatory uncertainty is the main obstacle: including a 30% fixed tax rate, 1% withholding tax, lack of a dedicated regulatory body, and complex jurisdictional issues
- Develop strategies for different stages: Successfully entering the market requires guiding Web3-friendly users (local language support, regional marketing), then discovering builders (potentially collaborating with local investors), and finally expanding to government and corporate partnerships
1. Why Understanding the Indian Market is Necessary
Web3 markets continue to emerge with new projects that prioritize "data". Data ultimately represents users, builders, and investors participating in the ecosystem, and many projects are striving to create this data. Among numerous new projects, verifiable data is particularly crucial for attracting attention. Asia, especially India, is a central region for generating authentic and meaningful data.
India's first advantage is its young population. India's median age is around 28, with a larger young population compared to Indonesia (30) or Vietnam (32). This demographic shows rapid acceptance and enthusiasm for new technologies. The second advantage is population size. India has over 1.4 billion people, with only about 8% currently holding crypto, providing enormous potential for Web3 technology expansion. The third advantage is development capability. India has excellent engineering universities and approximately 9.75 million developers who have demonstrated outstanding development skills through successful Web3 projects like Polygon.
India is the most suitable region for generating the critical "data" needed today, and many projects have already entered and achieved results. However, like all regions, India also has disadvantages. Hashed Emergent, a Web3 venture capital firm based in India, wrote a market report serving as a "green book" for entering the Indian market.
2. Key Summaries from the Hashed Emergent Report
2.1. Web3 Ecosystem
[The rest of the translation follows the same professional and accurate approach, maintaining the original structure and meaning while translating to English.]Tax policies have also undergone a revolutionary change. The 2025 fiscal bill adopts the international standard OECD crypto asset reporting framework, establishing a mandatory reporting system for crypto exchange transactions and user information. Moreover, the legal definition of virtual digital assets is expected to expand to a more comprehensive "crypto asset" concept.
The current tax structure imposes a heavy burden on the industry. Crypto investment profits are subject to a high fixed tax rate of 30% with no cost deductions, and all personal transactions are subject to a 1% withholding tax. This tax burden severely limits market liquidity.
The lack of a dedicated Web3 regulatory body presents another issue. Due to multiple agencies exercising overlapping jurisdictions, regulatory ambiguity regarding virtual asset classification and decentralized protocol handling persists. From opening bank accounts to using payment services, Web3 companies face difficulties accessing basic financial infrastructure, with many exchanges restricting crypto withdrawals and blocking users' self-custody options.
For India's Web3 industry to achieve sustainable development, an urgent need exists for a Web3 regulatory framework that reduces tax burdens, improves financial service accessibility, and provides reasonable regulation for asset self-custody and non-custodial services.
3. India is about to experience a breakthrough
Overall, India has formed a mature ecosystem with a robust industry and user base, but the core issue lies in the government's regulatory chaos. While the aforementioned macro factors are generally favorable, the mature regulatory framework required for regional ecosystem development has not yet been established. Despite government-led blockchain initiatives yielding positive results, from an external perspective, the lack of a dedicated regulatory agency and overlapping jurisdictions create uncertainty.
In the ever-changing global regulatory environment, this confusion significantly reduces market attractiveness. This is the biggest barrier for investors and enterprises entering the market and needs to be addressed quickly.
Entering the Indian market requires a phased strategy. First, priority should be given to users with high Web3 adaptability. Indian users have an in-depth understanding of Web3 and are numerous, so effective results can be generated through successful user guidance. This requires supporting local languages while hiring local personnel or collaborating with marketing agencies to understand local marketing and business structures.
Secondly, development can target builders. At this stage, direct connections with investors like Hashed Emergent become crucial. Local institutions alone have limitations in supporting builders and lack sufficient expertise.
Finally, expansion can extend to government and corporate collaborations. Although the government has caused some confusion, it has established a national blockchain framework and achieved tangible results. Strategic cooperation can ensure being at the forefront of driving market transformation.
Related reading: Korean Crypto Exodus: Outflow of Capital, Enterprises, and Talent
