India poised to become web3 powerhouse: expert

Speaking exclusively to Crypto.news, a blockchain and artificial intelligence expert explained why he believes India is poised to become a web3 giant.

India has long been a tech-savvy country, with over 750 million active internet users as of January 2024. The country’s booming IT sector accounted for 7.5% of its nearly $3.9 trillion economy in 2023.

With a digital competitiveness score of 60, India has proven its position as a global IT giant, ahead of all other BRICS countries except China. Naturally, this creates a solid foundation for the country to support its promising web3 and blockchain sector.

But the concept doesn’t just come out of thin air. India is already home to over 1,000 startups actively researching web3 and blockchain technologies. Some estimates expect the country’s web3 market to be worth over $1 billion by 2032.

Sanjay Saxena, co-founder and CEO of AI-powered blockchain network CIFDAQ, said India’s “mostly young population” will support this growth, highlighting that India’s share of global web3 developers has increased from 3% in 2018 to 12% in 2023.

“India is producing a new generation of tech-savvy individuals. A large portion of the developer base is between the ages of 20 and 22, reflecting the youthful energy driving India’s web3 development,” Saxena told crypto.news.

Leading educational institutions in India, such as the Indian Institutes of Technology and the National Institutes of Technology, have been pioneers in embracing emerging technology-based courses, offering studies on blockchain and other web3-related technologies as early as 2018.

Saxena explained that these initiatives are helping create a skilled workforce that will enable India to “meet the challenges of the decentralised future”.

Moreover, the government has also shown openness to adopting blockchain technology, as evident from numerous initiatives such as the Central Bank Digital Currency project that aims to create a blockchain alternative to the Indian rupee and the Ministry of Electronics and Information Technology’s initiatives to create a unified blockchain framework.

Saxxena added that more than 50% of Indian states are already exploring various blockchain initiatives.

Some notable examples include the Tamil Nadu state’s blockchain backbone initiative, a blockchain-as-a-service infrastructure that aims to secure and ensure the integrity of critical documents and data. Meanwhile, the West Bengal state’s NFT-based land mutation program was the first of its kind to create 50,000 NFTs to represent one million property records.

India’s private sector has not shied away from blockchain implementation either. Tech Mahindra, an IT giant with a presence in over 90 countries, has launched a ‘Stablecoin as a Service’ solution targeting financial institutions across the world, facilitating more efficient and secure digital transactions. Reliance, one of India’s largest conglomerates, is implementing blockchain in its supply chain processes.

Another IT giant, Infosys, has developed blockchain-based applications that aim to streamline processes and reduce fraud for banks and insurance companies.

However, challenges remain as the web3 sector needs clearer regulatory frameworks. The Indian government is still in the process of defining and implementing regulations that can fully support the growth and potential of blockchain technologies.

Despite repeated calls from key industry players, unclear tax laws persist, and according to Saxena, this is creating operational challenges for web3 startups. Beyond the impact on the cryptocurrency trading economy, the punitive tax requirements that have reportedly led to a migration to offshore exchanges are also causing a “brain drain.”

Saxena stressed that many virtual digital asset businesses and professionals are moving to “more favorable jurisdictions abroad,” adding:

“This migration not only leads to a loss of talent, but also reduces India’s potential as a digital innovation hub.”

To address this issue, Saxena called on the government to offer tax incentives and focus on infrastructure development, reiterating that “the combination of a skilled talent pool, strong ecosystem, favourable demographics, educational initiatives, government support, innovation and community engagement creates a compelling case for India’s rise in the web3 space.”