NEW DELHI, Oct. 4 (CandyPulse) — Indians are using crypto in huge numbers, but very little of that activity is staying at home. According to research from Chainalysis, India's domestic exchanges received just 0.7% of the value Indian users sent to crypto exchanges over the past year.
Key takeaways
| Measure | Figure |
|---|---|
| Value sent to exchanges by India-based users | About $88.4 billion |
| Share received by Indian exchanges | 0.7% |
| Indian exchanges' share before mid-2022 | About 7% |
| Share of trading volume on offshore platforms | About 90% (data presented to Parliament, May 2026) |
The sharp drop lines up with India's crypto tax rules, introduced in 2022. They include a 1% tax deducted at source (TDS) on crypto transfers.
CoinSwitch co-founder Ashish Singhal told researchers that domestic exchanges following the rules withhold the tax, while offshore platforms may not. For active traders, that difference adds up quickly, pushing them towards foreign platforms.
The irony is striking. India remains one of the world's biggest crypto markets by activity, even outpacing places like Singapore and Australia in exchange inflows. But most of that business, and the jobs, fees and tax revenue that come with it, is flowing abroad.
That's despite a strong year for some local players. CoinSwitch, for example, recently reported revenue up 150% and a return to profitability on an adjusted EBITDA basis.
When trading moves offshore, users often have less protection if something goes wrong, and the government collects less tax than its rules intend. Industry groups have long argued that lowering the 1% TDS would bring activity back to regulated Indian platforms.
Watch for any change to India's crypto tax rules, especially in the next Union Budget. A cut to the 1% TDS could quickly change where Indians choose to trade.
This article is for information only and is not financial advice.