India’s independent Web3 advisory body, the Bharat Web3 Association (BWA), has prepared a message for Nirmala Sitharaman, who returned as the nation’s finance minister for a second term this month. In its message shared with Gadgets360, the BWA said India needs a level playing ground for Web3 startups and businesses to thrive in. At present, India is in the process of deploying regulations to oversee the Web3 sector. The aim is to ensure that India’s crypto circle is safeguarded against the financial risks that volatile digital assets could expose them to.
Web3 needs Government support, BWA says
The BWA, that has a total of 36 members from India’s crypto industry, has been working with the lawmakers to help them draft appropriate rules and regulations to govern over the digital assets sector without hampering its growth.
Now that Sitharaman is back and is expected to present the finalised Union Budget 2024 in the coming days, the BWA has decided to bring the needs of the Web3 sector to her notice.
“The Web3 sector holds immense potential to revolutionise multiple sectors, including finance, governance, and supply chain management while also enhancing transparency and efficiency. Given this, we propose the government to develop a clear regulatory framework for Web3, support virtual digital asset (VDA) providers in their customer focus, and rationalise taxation framework for the digital assets sector,” Dilip Chenoy, the Chairperson of the BWA said in his statement.
The BWA said it is of umpteenth importance that Web3 services get access to the provision of banking services. The advisory body has further urged the government to encourage investment and growth in the Web3 sector. The BWA and its members are concerned that if India delays the creation of a lucrative ecosystem for Web3 to grow in, it could miss out on profitable and technical opportunities as it did during the Web2 era.
India’s current position on Web3
Between 2022 and 2024, India made some milestone decisions on Web3 regulations. Starting July 2021, India brought crypto gains under a tax regime. In India, crypto incomes are taxed by 30 percent whereas one percent TDS is deducted on each crypto transaction. The country has brought the crypto sector under the Prevention of Money Laundering Act, that requires all virtual digital asset providers to collect the KYC details of their customers and report any identified suspicious activity to relevant authorities.
During December 2022 and 2023, India served as the President of the G20 group of nations. As part of its presidency, India worked with the International Monetary Fund (IMF) and the Financial Stability Board (FSB) to draft crypto regulations that would work uniformly on a global level.
Despite India’s gradual approach in whole-heartedly welcoming the Web3 sector as part of its financial and industrial ecosystem, the country has shown remarkable growth in blockchain adoption in 2023, as per a report published by Hashed Emergent, a Web3 venture capital firm focussed on India.
From three percent in 2018, India’s global share of blockchain developer pool, rose significantly to 12 percent last year, the report said. The country also reportedly claimed the top spot for on-chain adoption in 2023 over 150 countries, reflecting over 35 million trading accounts on the top Indian exchanges. The report has predicted that India has a promising future in terms of establishing itself as a leader and early creator of Web3 technologies especially because of its large pool of developers.
While the crypto circle in India is hoping for Sitharaman to cut down on crypto taxes, the finance minister has paid no heed to the sector’s urges so far.