Primus Partners Pvt Ltd (Primus), provider of management consulting services, has predicted that Web3 sector will generate 2 million well-paying direct jobs in India over the next decade. Additionally, there is expected to be a threefold multiplier effect on indirect jobs.  

The report, titled "Unlocking the Web3 Potential: India's Journey from a Talent Exporter to a Product Powerhouse," highlights that India is poised to lead the way in the technological revolution. The country possesses the essential elements to establish itself as a dominant force on the global stage. 

India is home to more than 900 enterprises in the Web3 sector, making significant strides by accounting for 11 per cent of the global Web3 developer community in 2022, securing its position as the third-largest talent pool of developers on a global scale.  

According to Chainalysis, India leads in grassroots crypto adoption globally and ranks as the second-largest market in terms of raw transaction volumes in 2023, demonstrating a thriving Indian market. This growth is propelled by a thriving startup environment, abundant talent, widespread internet accessibility, a digitally adept population, and an increasing interest in Web3 technologies. 

Sharing his insights on the potential for Web3 globally in the years to come, Shravan Shetty, managing director of Primus Partners said, “As we witness the evolution of Web3, its potential for transformative growth becomes increasingly evident. Our study thoroughly explores this expanding landscape, offering valuable insights that illuminate the path forward for India with strategic attention to coordinated global efforts, robust domestic legislation, heightened awareness, and a nurturing business environment." 

Navigating Web3 Challenges in India 

The report observes that despite significant growth in India's Web3 sector, challenges persist in the form of taxation issues and Ease of Doing Business (EODB) hurdles.  

The report highlights that the high TDS rate introduced by the Finance Act of 2022 has led to a shift of trade to foreign platforms and the grey market, undermining consumer protection efforts of compliant Indian platforms.  

The report advocates for a recalibration of the tax framework, emphasising that taxation should support compliance and encourage participants in monitored transactions, rather than driving them away. It underscores the importance of clear guidelines and specific regulations for Web3 businesses, aligning with Start-up India recognition. 

Additionally, the report emphasises that access to UPI and banking rails within the VDA ecosystem remains restricted, leading users to opt for foreign platforms and compromising payment security. The lack of clear rules and regulations further complicates registering a Web3 business and opening a bank account in India. 

While existing legislation includes Virtual Digital Assets (VDAs) in frameworks like the Prevention of Money Laundering Act (PMLA), and CERT-IN Directions, the report notes a fragmented approach.