$ 3.8 billion in cumulative volume have been relocated abroad since the Indian crypto taxes came into force

$ 3.8 billion in cumulative volume have been relocated abroad since the Indian crypto taxes came into force

While the Indian crypto exchanges lost a significant part of their trading volume after new taxes have entered the sector, the losses have so far been given in percent, with most estimates in more than 90 % compared to earlier information.

Now a new study has quantified the value of the cumulative trade, which has shifted after the new taxes of Indian to foreign crypto exchanges.

Cryptopotato previously reported that Indian retailers flock to foreign exchanges in droves after the tax and regulatory environment in the country has become "unprofitable".

$ 3.8 billion $

Esya Center, an Indian Think Tank on questions of technology policy, in a test report (3.85 billion US dollars) of the cumulative commercial volume were relocated between February and October 2022 by Indian crypto exchanges to foreign competitors.

The report entitled "Virtual Digital Asset Tax Architecture in India: A Critical Examination" examines how the new taxes for the domestic cryptomarkt, which were proposed on February 1 in the Union budget 2022-23, had an impact on the entire business in this sector.

It said RS. 25,300 Crores ($ 3.05 billion) of cumulative trade in the six months to October 2022, which has been deducted from the Indian crypto exchanges since the new taxes came into force.

Taking the peer-to-peer trade into account, the total contribution of the trade volume of India to foreign exchanges is 80,000 crores (9.67 billion US dollar), says the ESYA Center.

"India Tax Treatment of VDAs is declining compared to other countries with high VDA adoption rates such as the USA, Great Britain, South Africa, Vietnam, the Philippines and Brazil," she said.

volume fall

The decline in the commercial volume was gradually, the initial rush 15 % of the trade volume in the first two months since the tax change of the Indian finance Minister Nirmala Sitharaman in her budget speech on 1. February.

Another 14 % has been lost in the three months since April 2022 when the 30 % tax came into force on crypto profits. The high taxation was implemented without the regulation to offset losses with profits.

The third and last blow came when a transaction tax of 1 % came into force on July 1, 2022, which eroded up to 81 % of the trading volume on the Indian stock exchanges, the report said.

"Many Indian VDA users seem to switch from domestic centralized VDA exchanges to foreign objects (estimated 17,000 users changed in the analyzed period), which is visible from February 2022 (i.e. after the announcement of the Union household)", claimed the report.

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