The utilization of blockchain and cryptocurrency has seen a steep rise over the last few years, and is predicted to increase swiftly. By 2030, it is expected that the number of individuals involved in this field will exceed one billion. India, with a population of over 1.3 billion, has traditionally been a center for technological advancement and innovation. In recent years, with the rapid growth of blockchain and cryptocurrency, India has emerged as a major player in the Web3 infrastructure space and is strategically positioned to contribute significantly to this upsurge owing to various crucial factors that make it a perfect breeding ground for the advancement of Web3 technology. As the global trend moves towards decentralization, India is positioned to establish itself as a significant force in the Web3 landscape. In this write-up, we will explore the trends that are transforming India into a Web3 infrastructure powerhouse as well as the opportunities that lie ahead for the country in this exciting new space.
India’s Rise as a Global Tech Hub and its Implications for Web3 Development
India’s economy is resilient and growing, and it has a rapidly expanding middle class that is projected to become the world’s largest.
India’s achievements go beyond its thriving economy and middle class, with the country’s tech industry poised for further expansion and innovation due to its growing demand for technology products, substantial investments in research and development, and access to affordable internet. These advancements have also created opportunities for the emergence of Web3 technology in India.
Web3 is the next phase of the internet that seeks to create a decentralized and democratized internet experience. The concept involves a shift from centralized platforms to decentralized ones that offer greater transparency, security, and control. In India, Web3 is gaining momentum, with numerous blockchain-based projects and initiatives being launched across various sectors, including finance, healthcare, and governance.
The growth of Web3 in India is underpinned by the country’s tech ecosystem. India has a thriving startup culture, with a significant number of startups focusing on blockchain and Web3 technologies. Moreover, India is home to a large pool of tech talent, with many skilled developers and engineers graduating from the country’s top-tier engineering and technology institutions. This talent pool is also bolstered by a favorable regulatory environment and government initiatives aimed at promoting the adoption of blockchain and other emerging technologies.
The rise of crypto communities has been one of the landmark developments in India’s Web3 landscape. These communities bring together individuals interested in blockchain and cryptocurrency and provide a platform for networking, knowledge-sharing, and collaboration. Crypto communities in India have been instrumental in promoting the adoption of cryptocurrency and blockchain technologies, as well as in driving innovation in the space.
In conclusion, India’s rise as a global tech hub presents a unique opportunity for the growth and development of Web3 technologies. The country’s thriving tech ecosystem, supportive regulatory environment, and talented workforce provide a solid foundation for the emergence of blockchain-based projects and initiatives. With the continued growth and innovation of India’s tech industry, it’s safe to say that the future of Web3 in India is bright.
Grassroots Crypto Adoption
India’s journey with cryptocurrency has been marked by significant events, beginning with its outright ban in 2018 to the provision of regulatory clarity in 2022. The Reserve Bank of India (RBI) issued a circular in 2018 prohibiting banks from dealing with crypto exchanges, which led to a legal dispute. India has been in a state of flux regarding cryptocurrency regulations. In 2020, the Supreme Court overruled the Reserve Bank of India’s directive that prohibited trading without any regulations. In 2021, the government proposed a complete ban on private currencies. However, in March 2022, the budget bill passed cryptocurrency tax regulations, offering more clarity for the emerging crypto industry in India. As India continues to navigate the realm of cryptocurrency regulations, efforts are being made towards establishing a transparent and regulated environment for Web3 enterprises to function within. This enhanced regulatory framework will not only be advantageous for the Web3 sector, but will also promote confidence among investors and traders in India, allowing them to more securely participate in the cryptocurrency market.
According to the 2022 Global Crypto Adoption Index by Chainalysis, India has become a significant contributor to the grassroots adoption of cryptocurrency, surpassing the US and ranking fourth globally. The index evaluated five indicators that depict the extent of retail adoption, including the value of DeFi and retail DeFi received, the trade volume of P2P exchanges, the value received from centralized services, and the value of retail centralized services received. India exhibited impressive performance in most of these criteria, indicating the country’s increasing interest in cryptocurrency and blockchain-related innovations.
Web3 Startup Ecosystem
According to a study conducted by the National Association of Software & Services Companies (NASSCOM), India’s Web3 startup ecosystem is thriving. The study revealed that there are over 450 Web3 startups in the country, with four unicorns among them. This indicates the growing interest and investment in decentralized technologies such as blockchain, cryptocurrency, and decentralized applications (dApps). The Web3 industry in India is expected to continue to grow as more entrepreneurs enter the space and investors seek opportunities in this emerging field. Furthermore, India has attracted over $1.3 billion in Web3 investments since 2020. The success of Polygon, formerly known as Matic Network, serves as a prime example of India’s potential in the Web3 arena. The founders of the project, Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun, all hailing from India, serve as an inspiration for many Indian Web3 startups.
The Indian startup ecosystem in the Web3 space has a promising pool of entrepreneurs with a perfect blend of skills and perseverance to create cutting-edge decentralized applications and services. Among these, one noteworthy Ethereum scalability solution is being developed by a competent team that has earned significant acclaim, positioning the project as a leader in its field. The success and growth of this project, Polygon, have encouraged numerous Indian entrepreneurs to explore the opportunities in the Web3 arena.
India leading the revolution with Web3 Workforce
India has a promising and competent workforce that can drive innovation and progress in the Web3 industry. Boasting more than 11% of the world’s Web3 experts, India is poised to experience a growth rate of over 120% in the next 1-2 years, indicating its dominance in this field.
The country’s emphasis on STEM education and robust education system have produced a highly skilled workforce capable of making significant contributions to the development of Web3. Its reputation as a global technology hub, coupled with a burgeoning Web3 talent pool, makes it an ideal destination for Web3 startups seeking to expand their operations.
Zero-Knowledge Proof (ZKP) Driving India’s Web3 Infrastructure Forward
Zero-Knowledge Proof (ZKP) is rapidly gaining traction in India as a key technology for securing web3 infrastructure. It is a powerful tool for securing data privacy and confidentiality, and its potential applications in web3 infrastructure are enormous. India has emerged as a major player in the development of web3 infrastructure, with a vibrant startup ecosystem and a growing pool of highly skilled software engineers. In recent years, Indian startups have made significant strides in developing ZKP-based solutions for data security and privacy. The increasing adoption of ZKP technology in India is expected to drive the country’s growth as a leading web3 infrastructure powerhouse, as it enables Indian startups to compete with global players in the field of blockchain and decentralized technology. According to a report by Inc42, India’s blockchain market is expected to grow at a compound annual growth rate of 57.2% between 2021 and 2026, and the adoption of ZKP technology is expected to be a major driver of this growth. As such, ZKP is a major trend that is expected to have a significant impact on India’s web3 infrastructure and its position as a global leader in this space.
NFTs: Key Drivers of India’s Web3 Infrastructure Growth
As per the “India NFT Market Intelligence and Future Growth Dynamics Databook – 50+ KPIs on NFT Investments by Key Assets, the NFT industry is anticipated to maintain a steady growth trajectory throughout the forecast period , exhibiting a compound annual growth rate (CAGR) of 44.1% from 2022 to 2028. Consequently, the NFT Spend Value in India is predicted to expand significantly, surging from its 2022 value of US$3394.2 million to a remarkable US$27067.3 million by 2028. This explosive growth in NFTs has led to a surge in demand for web3 infrastructure, such as decentralized marketplaces, blockchain storage solutions, and smart contract platforms. As a result, Indian startups and tech companies are investing heavily in building and scaling these technologies, with the aim of becoming global leaders in the web3 ecosystem.
NFTs have also opened up new avenues for investment and fundraising in India. Indian blockchain start-up Polygon secured a significant amount of funding, raising $450 million (approximately Rs 3,400 crore) at a valuation of approximately $10 billion in 2022. This funding round marked a major milestone in the Web3 industry within India, being one of the largest investments in the crypto and blockchain sector. The funding was led by Sequoia Capital India along with notable participation from SoftBank, Tiger Global, and other investors. The startup has also recently launched an NFT studio to help artists and creators in India monetize their digital assets.
The Indian government is also exploring the use of blockchain technology and NFTs to streamline administrative processes and reduce corruption. In 2022, the Maharashtra government has partnered with Algorand blockchain and MAPay, a healthcare technology company, to securely store health data using Non-Fungible Tokens (NFTs). The Indian government aims to create a comprehensive blockchain framework that will revolutionize various sectors, such as education, pharmaceuticals, agriculture, energy, e-governance, and more. The potential for incorporating and embracing blockchain technology in India is extensive, and the government is actively working to facilitate its rapid and seamless adoption. It is expected that blockchain technology will soon emerge as a transformative force, reshaping the landscape of India.
Driving Change through Social Projects
In recent years, India has emerged as a hotbed for social projects aimed at building Web3 infrastructure. With the proliferation of blockchain technology, the country has seen a surge in startups and initiatives aimed at leveraging the technology to drive social impact. According to a report by The Block, India is home to over 2,600 blockchain startups, making it the second-largest blockchain ecosystem in the world after the United States. These startups are not only focused on making profits but are also keen on addressing critical social challenges. Their efforts are focused on developing innovative approaches to enhance financial access, streamline identity verification, and promote transparency throughout the supply chain. For example, startups like MyCrop and CropIn are using blockchain to improve agricultural practices and increase farmer incomes, while others like Khushi Baby and ID2020 are working on digital identity solutions for vulnerable populations. These social projects not only address pressing societal challenges but also position India as a leading player in the Web3 ecosystem, with a strong focus on building infrastructure that can drive sustainable and inclusive growth.
Final thoughts
As per a study conducted by NASSCOM, India is in a favorable position to take advantage of the global Web3 surge, which is estimated to contribute approximately $1.1 trillion to the country’s Gross Domestic Product (GDP) in the next ten years. Over the last two years, investments in India’s Web3 startups have surged 37 times, indicating a remarkable growth trend. India has an advantage over the US, China, and the UK in terms of demand-supply gap for talent in the Web3 development sector. This advantageous position is likely to contribute to India’s growing prominence in the field. These factors position India to play a major role in advancing the global Web3 industry, while simultaneously driving economic growth and creating job opportunities within the country.
Web3 entrepreneurs across India are currently constructing the decentralized infrastructure of the future right under our noses. Despite being in its infancy, the Web3 industry is witnessing a surge of Indian builders who are pioneering novel solutions, many of which will pave the way for widespread adoption of this disruptive technology.
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