The Indian Web3 and crypto industry is determined to develop its competitive edge to lead the current Internet revolution globally. By doing so, you will be able to generate more than $1 trillion. India must harness and reward the industry that can help the nation achieve its goal of becoming a $5 trillion economy.

India on the cusp of transformation

As the country prepares to be a $5 trillion economy, its story of economic growth has been inspiring. Just a decade ago, India’s GDP was the 11th largest in the world. This year India became the world’s fifth largest economy, surpassing the UK and now trailing only the US, China, Japan and Germany. This generates a lot of optimism, especially when the global situation remains precarious due to various macroeconomic conditions.

The World Bank report, ‘Navigating the storm’, published in December 2022, further ensures that the Indian economy is relatively well positioned to weather the global contagion effects compared to most other emerging markets. Furthermore, policy reforms and stable FDI inflows shielded India from volatility in foreign portfolio flows. At the same time, strong demand for information technology and financial services kept the services trade surplus at a high level, at around 3.7% of GDP.

The foundation for more sustained and long-term growth has been fueled by investment in infrastructure, digitization, internet and smartphone penetration, combined with a wave of consumption led by millennials and Gen Z, among others. Not forgetting that one of the critical factors in India’s growth engine is our large and talented young workforce. The median age is now 28.4, compared to China, Japan, and the US, which stand at 37, 48.6, and 38.5, respectively. India is definitely on its way to being a talent powerhouse.

Another contributing factor to this phenomenal story is India’s ability to develop/build technological innovations. It is essential to emphasize the role of sectors such as IT/IT, cloud services, big data, AI and IoT for their robust contribution of more than $200 billion to the nation’s GDP.

Promotion of Web3 technology in India, which could bring in 1.1 trillion dollars

India is currently going through another revolution powered by the innovative blockchain technology. In recent years, the Web3 and crypto industry has experienced stellar growth, with much greater opportunities and avenues for investment. According to the Chainalysis Report, India is in the top five countries for cryptocurrency adoption and ranks sixth for DeFi adoption. The evolution of Web3 is happening at a much faster rate than anticipated. Interestingly, a report, “India’s $1 Trillion Digital Asset Opportunity”, released last year by the US-India Strategic Partnership Forum (USISPF) mentioned that adopting and fostering Web3 technology in India could contribute $1, 1 trillion economic growth to its GDP over the next 10 years. years.

India’s IT industry is a fantastic success story and an outstanding example reinforcing that if technologies are embraced and supported through the right policies to motivate entrepreneurs, stories can be made. The IT and emerging technologies sectors have generated 4 million jobs and provided indirect employment to 10 million.

The first signs of a similar momentum are being seen in the VDA industry. Various reports have reinforced and affirmed this view. For example, NASSCOM report “The India Web3 Startup Landscape” mentioned that $30.5 billion VC funding flowed into the blockchain and crypto market in 2021. This equates to a 15x growth in the venture capital funding for crypto and blockchain startups since 2015. The report claims that the country is now home to more than 450 Web3 startups and employs some 75,000 professionals. It is estimated that the size of the market will grow 25 times by 2028 and will create more than 50,000 jobs by 2025.

Most of these startups are being built in decentralized finance (DeFi), NFTs, metaverse space, etc. which are in high demand globally, eventually leading to India becoming a Web3 powerhouse.

In this context, it is essential to recognize the role of technology in nation building. Apart from the economic value it brings, the value it brings to any society and company has a much greater impact.

Web3 presents an unprecedented opportunity for India

Web3, including blockchain and crypto, presents an unprecedented opportunity for India, and its potential will be fully realized after its integration. These innovative technologies and assets have the potential to deliver a variety of services, some for the first time, to the vast population of India. For example, cryptocurrencies must be seen beyond speculative assets. Real asset tokenization, supply chain, healthcare, agriculture, entertainment, and art are some of the sectors that are poised to generate the most socio-economic value for India using blockchain technology.

Blockchain can support scaling up this initiative which would require expanding and strengthening primary healthcare infrastructure, enforcing quality standards, and conducting regular audits. Just as the Internet fundamentally altered the way we live and work, Web3 has put data ownership in the hands of the owner.

The Web3 movement is very much in line with the ethos of Aatmanirbhar Bharat, Start-Up India and Digital India, who promote homegrown digital-first innovation. This will transform many businesses and will also help technology adoption. On the funding side, the venture capital industry has invested a record $25 billion in crypto investments, according to CB Insights’ “2021 State of Blockchain” report.

Conclution
Coming from the debate about whether Web3 is here to stay, the conversation has changed direction. The new narrative is how it will shape the economy in the future, why governments, companies and venture capitalists must define their Web3 and crypto strategy now, how we make Web3 part of our daily lives by bringing use cases innovative.

With India assuming the G20 presidency, we have an opportunity to lead global consensus-building and cooperation to build a progressive framework for the VDA industry, address key concerns of regulators, and provide a path for innovation. Regulation is key to the stability of this industry and will eventually pave the way for further innovation in India.

There is concrete evidence that emerging technologies are influencing the market faster than expected and contributing significantly to GDP, and Web3 & crypto will be no exception. This will only be possible if the government introduces measures for the Web3 industry in line with what it did to promote other technology sectors. For example, for the dynamic growth of the Indian software industry, the government announced in the 1990s a number of measures, including corporate profit tax breaks, corporate income tax breaks, software technology parks and special economic zones, among others. With similar regulatory initiatives and support, the Web3 industry will certainly be able to contribute $1 trillion to India’s $5 trillion GDP target.

(
The author is a co-founder and CEO of CoinDCX)


(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are my own. These do not represent the views of Economic Times)