[Special Report] The Web3 Market's Need for Numbers: India's Essential Role
Strategic Approaches for Web3 Project Success in India - Insights from Hashed Emergent
This report by Tiger Research, based on the Hashed Emergent India report, analyzes India's essential role in the Web3 market. It explores ecosystem growth, regulatory challenges, and strategic approaches for project success in this emerging market.
TL;DR
Key Region for Web3 Projects: With 1.4 billion people (median age 28), 9.75 million developers, over 1,200 projects, and $3 billion in investments, India offers optimal conditions for generating the necessary scale for Web3 ecosystem growth
Regulatory Uncertainty as the Primary Obstacle: Government regulatory challenges including 30% fixed tax rates, 1% withholding tax, absence of dedicated regulatory bodies, and complex jurisdictional issues present significant barriers to market growth
Phased Approach Strategy Required: Successful market entry necessitates a strategic progression from Web3-friendly user onboarding (local language support, regional marketing) to builder targeting (partnerships with local investors) and finally expanding cooperative relationships with government and enterprises
1. Why You Need to Understand the Indian Market
New Web3 projects continue to launch at a rapid pace, but what they chase above all is numbers—a proxy for real users, builders, and investors in their ecosystem. Yet many projects struggle to generate meaningful traction. In a crowded field, verifiable metrics stand out as the clearest signal to attract attention. Asia—particularly India—has emerged as a key region where projects can achieve real scale, not inflated stats.
India’s first advantage is its youthful population. With a median age of around 28, India is younger than Indonesia (30) and Vietnam (32), giving it a broader base of early adopters eager to embrace new technologies.
The second advantage is scale. With a population exceeding 1.4 billion—and only about 8% currently holding cryptocurrency—India offers massive untapped potential for Web3 adoption.
Third is its world-class development talent. India boasts top-tier engineering universities and an estimated 9.75 million developers. Projects like Polygon already showcase the country’s strong capabilities in Web3 innovation.
India is one of the most promising regions for generating the critical "numbers" that Web3 projects seek today. Many projects have already entered the market in pursuit of meaningful results. However, like any region, India presents both opportunities and challenges. A well-informed approach is essential—and for that, the India market report by Hashed Emergent, a Web3 VC firm based in India and focused on emerging markets, offers valuable insights.
By providing your email address, you consent to receive promotional communications from Hashed Emergent, including newsletters, marketing emails, and updates about our products, services, or events. You are subject to our Terms of Use and can unsubscribe at any time. Your information will be handled in accordance with our Privacy Policy.2. Key Summaries from Hashed Emergent Report
2.1. Web3 Ecosystem
India has built a robust Web3 ecosystem, with over 1,200 projects spanning various sectors. Indian Web3 startups have raised more than $3 billion in total funding to date, with 2024 showing particularly strong momentum—securing $564 million, more than double the investment volume of 2023.
By sector, infrastructure has attracted the most investment, followed by finance. In contrast, funding for entertainment-related projects has declined significantly. Notably, Indian founders based overseas have played a key role in advancing infrastructure projects, contributing to globally recognized platforms such as EigenLayer, Sentient, and Avail, all of which have drawn substantial investor interest.
Emerging areas like DePIN (Decentralized Physical Infrastructure Networks) and BaaS (Blockchain as a Service) have recently gained traction, reflecting investor interest in applying decentralization across a wider range of industries.
Investment is also increasingly targeting technologies relevant to the AI era, including AI-based infrastructure, middleware, and data tooling. Within India, leading VCs such as Hashed Emergent and Polygon are actively supporting and investing in the local Web3 landscape.
2.2. Consumer and Enterprise Adoption
India’s cryptocurrency investment market has shown a clear resurgence since 2023. The country ranked first in Chainalysis’ Global Crypto Adoption Index, scoring highly in both centralized exchange (CEX) and decentralized finance (DeFi) activity.
Retail investor portfolios are composed of approximately 45% blue-chip cryptocurrencies with established stability. Interestingly, memecoin trading volume grew fivefold compared to other crypto assets—pointing to a shift in retail investor preferences.
By age group, those aged 27 to 40 dominate token investments, supported by higher income levels and stronger market awareness. Investors in their 40s recorded the highest average investment per user—three times that of other age groups. Meanwhile, Gen Z represents 35% of all crypto investors, contributing significantly to the market’s continued growth.
India's Web3 gaming market has grown by securing a user base centered on Generation Z. Particularly, 50% of gamers are under 25 years old, demonstrating how younger demographics quickly adapt to new gaming paradigms. The average revenue per user (ARPU) for Web3 games reached $220, significantly higher than the $120 for Web2 games.
India’s Web3 gaming market has expanded rapidly, driven by a user base largely composed of Generation Z. Notably, 50% of gamers are under the age of 25, reflecting how younger demographics are quick to embrace new gaming models.
The average revenue per user (ARPU) for Web3 games stands at $220—significantly higher than the $120 ARPU for traditional Web2 games. In addition, the paying user ratio in Web3 games is 64%, with high-spending users accounting for 11%. Both figures exceed those of Web2 games (56% and 8%, respectively), indicating a stronger revenue structure.
Moreover, 38% of traditional gamers in India have already experienced Web3 gaming, and among them, 60% continue to engage—highlighting strong user retention.
The Indian government has taken proactive steps to support blockchain adoption through the National Blockchain Framework, which aims to improve the safety and transparency of public services. Key initiatives under this framework include:
Vishvasya: A Blockchain-as-a-Service platform;
NBFLite: A sandbox environment designed for startups and universities to accelerate blockchain research;
Praamaanik: A tool for verifying mobile app authenticity;
National Blockchain Portal: A centralized hub for blockchain resources and initiatives.
In parallel, the Reserve Bank of India (RBI) is leading a Central Bank Digital Currency (CBDC) pilot, which has already onboarded 5 million users in collaboration with 16 banks. The pilot is testing blockchain-based payment methods.
2.3. Developer Ecosystem
India has established itself as a global hub for Web3 entrepreneurs and developers, now accounting for 12% of the world’s cryptocurrency developer base—the largest share globally.
According to a survey of over 500 developers, India's Web3 ecosystem is rapidly growing through young talent, entrepreneurial energy, and expanding global exposure. An ecosystem supporting growth has formed through university partnerships and flexible working models.
However, challenges remain. Despite growing international engagement, 51% of surveyed developers stated that their salaries still fall short of global standards.
Hackathons and developer communities have played a crucial role in shaping India’s Web3 landscape. These platforms offer hands-on experience, mentorship, funding access, and opportunities for global visibility. As participation continues to rise, they are paving the way for the next generation of Web3 developers.
2.4. Regulations, Tax and Policy
India’s Web3 industry is undergoing a period of transition, marked by rapidly evolving regulations and shifting tax policies. While regulatory initiatives aim to enhance transparency and investor protection, stringent measures and high tax burdens are currently limiting market growth—highlighting the need for more balanced policy development.
Since 2023, the Indian government has significantly strengthened anti-money laundering (AML) regulations for virtual assets. All Virtual Asset Service Providers (VASPs) are now required to register under AML laws, implement customer identification procedures, maintain transaction records, and appoint dedicated AML officers.
Regulatory enforcement intensified further in late 2024, when the government took the unprecedented step of blocking access to foreign cryptocurrency exchanges that failed to comply with local laws. This move clearly established regulatory compliance as a non-negotiable requirement for market entry.
Tax policy is also undergoing major reform. The 2025 Finance Bill introduced a mandatory reporting framework aligned with the OECD’s Crypto Asset Reporting Framework, requiring disclosure of crypto transactions and user information. At the same time, India plans to broaden the legal definition of virtual digital assets to encompass a wider category of “crypto assets.”
However, the existing tax structure remains a significant hurdle. Cryptocurrency investment profits are taxed at a flat rate of 30%, with no allowance for cost deductions, while each transaction is subject to a 1% withholding tax. These policies place considerable pressure on market liquidity.
Structural issues also persist. The absence of a dedicated Web3 regulatory authority has resulted in fragmented oversight, with overlapping responsibilities among multiple government agencies. This has led to ongoing ambiguity in the classification of virtual assets and the treatment of decentralized protocols. As a result, many Web3 companies face barriers to accessing basic financial infrastructure, including bank accounts and payment services. In addition, some exchanges restrict cryptocurrency withdrawals, limiting users’ ability to self-custody assets.
To enable sustainable growth in India’s Web3 industry, key priorities include the establishment of a Web3-specific regulatory framework, reduction of tax burdens, improved access to financial services, and the development of reasonable policies for non-custodial services such as self-custody.
By providing your email address, you consent to receive promotional communications from Hashed Emergent, including newsletters, marketing emails, and updates about our products, services, or events. You are subject to our Terms of Use and can unsubscribe at any time. Your information will be handled in accordance with our Privacy Policy.3. India at the Cusp of a Breakthrough
Overall, India has built a relatively mature Web3 ecosystem, with established industries and a broad user base. However, the core challenge remains regulatory uncertainty. While macro-level fundamentals are generally favorable, a comprehensive and coherent regulatory framework—essential for long-term ecosystem development—has yet to be established. Despite the government's active role in promoting blockchain initiatives, the lack of a dedicated regulatory body and overlapping jurisdiction among agencies continue to create ambiguity, particularly from the perspective of foreign stakeholders.
In a changing global regulatory environment, this confusion significantly reduces market attractiveness. This acts as the greatest barrier to market entry for investors and companies, necessitating prompt resolution. Fortunately, various industry leaders including Hashed Emergent continue dialogue with regulatory authorities, and these efforts are likely to become the starting point for change.
Given the current landscape, entering the Indian market requires a phased approach:
1. Focus on high-adaptability users
Indian users are generally well-versed in Web3 and exist in large numbers. Effective user onboarding can yield strong early results. To succeed, companies should invest in local language documentation and work with local personnel or marketing agencies that understand the nuances of India’s digital culture and business environment.
2. Engage the builder community
The next phase should target builders. At this stage, direct collaboration with ecosystem investors like Hashed Emergent becomes essential. Local agencies often lack the technical depth or resources needed to support this group effectively.
3. Establish strategic partnerships with government and enterprises
Despite ongoing regulatory challenges, the Indian government has achieved tangible progress through initiatives such as the National Blockchain Framework. Strategic cooperation with public institutions and major enterprises can help secure an influential position in the market and potentially shape future policy direction.
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