India gives you two very different things depending on what you are building. As a place to hire engineers, it is one of the largest and most experienced blockchain talent pools in the world. As a place to run a consumer crypto business, it combines mandatory anti-money-laundering registration with a tax regime that has pushed much trading activity, and many founders, offshore.
The regulatory picture
India has not banned or comprehensively regulated cryptoassets. Instead it regulates them through anti-money-laundering law and taxation, while the Reserve Bank of India remains openly skeptical of private cryptocurrencies.
FIU-IND registration
Since March 2023, businesses providing exchange, transfer, custody or certain issuance-related services for virtual digital assets (VDAs) have been reporting entities under the Prevention of Money Laundering Act. They must register with the Financial Intelligence Unit – India, perform KYC, maintain records and report suspicious transactions. This applies to offshore platforms serving Indian users too: in late 2023 FIU-IND issued notices to several large offshore exchanges, their websites were blocked, and some later registered and paid penalties to resume service.
Taxation
- 30% tax on VDA gains (plus surcharge and cess), effective from the 2022–23 financial year, with no deduction other than acquisition cost and no set-off of losses against other income or even other VDA gains.
- 1% TDS (tax deducted at source) on transfers of VDAs above thresholds, effective from July 2022. Exchanges and in some cases buyers must deduct and deposit it.
- GST applies to platform services such as trading fees.
The TDS in particular changed behavior: it ties up capital on every trade, which hurts high-frequency and market-making activity on Indian platforms. If you are building a trading or DeFi product with Indian users, model the tax flows in your product and back office from the start.
The broader stance
The Supreme Court in 2020 set aside the RBI's 2018 circular that had cut crypto businesses off from banking, but banks remain cautious. The RBI has piloted the digital rupee (e₹) for retail and wholesale use since late 2022. A government discussion paper on crypto policy has been anticipated for some time; check whether it has appeared and what it proposes. India's Digital Personal Data Protection Act 2023 also affects how you store user data, including any personal data you might be tempted to put on-chain.
The talent market
India's strength is engineering depth at scale. Bengaluru, Hyderabad, Pune, Chennai, Mumbai and the Delhi NCR region host large software workforces, and a substantial share of the world's Web3 engineering, including work for protocols headquartered elsewhere, is done by Indian developers. Polygon, now one of the most widely used Ethereum scaling ecosystems, was founded by Indian engineers. Hackathon culture is strong, and Solidity, Rust and Go developers are relatively easy to find.
Costs are lower than in North America or Western Europe, but the gap for senior protocol and security engineers has narrowed because those people are hired globally and paid accordingly. The tax regime has also encouraged founders to incorporate in Dubai or Singapore while keeping engineering in India, so you will often see that split.
Evaluating Indian development teams
The market includes everything from excellent protocol engineers to firms that resell the same white-label scripts under different names. The quality spread is wider than in smaller markets, so evaluation matters more.
Signals of a strong team
- Public code: GitHub repositories, audit reports of their contracts, contributions to open-source protocols.
- Engineers you can interview directly, not just a sales manager.
- A clear testing and security process: unit and fuzz tests, internal review, and an independent smart contract audit before mainnet.
- Honest scoping: they push back on unrealistic timelines.
Warning signs
- Fixed-price "clone scripts" for exchanges or DeFi protocols that promise launch in days. Read our notes on white-label exchanges before buying one.
- Reluctance to put code in your own repository from day one.
- Portfolios of products you cannot find live on-chain.
Working model
Time-zone overlap with Europe is good and with the US East Coast partial. Teams that work well with foreign clients usually assign a technical lead who writes specs back to you and runs regular demos. If you are serving Indian users yourself, a local partner who has implemented FIU-IND reporting and TDS deduction is valuable; for offshore products, focus on engineering quality. For a broader view of vendor selection, see blockchain consulting, and compare a regional hub in the UAE guide and the Singapore guide.
Frequently asked questions
Is crypto legal in India?
Owning and trading cryptoassets is not banned. VDA service providers must register with FIU-IND and comply with AML rules, and gains are taxed under specific provisions.
Can an Indian startup issue its own token?
There is no dedicated token-offering framework, so issuance is uncertain territory, and token transfers attract VDA tax treatment. Many teams structure issuance through entities abroad, which brings its own legal and tax questions.
Do offshore exchanges need to register in India?
If they serve Indian users, FIU-IND has made clear that registration applies, and enforcement since 2023 has backed that up.
Is hiring in India still cheaper?
For most roles, yes. For senior smart contract security and protocol engineers, global demand has pushed compensation much closer to international levels.