India has shown significant growth in its Web3 ecosystem, with over 1,000 startups operating in the space and securing over $2.5 billion in funding collectively. Bengaluru has emerged as a key industrial hub for Web3 startups, reflecting the country’s focus on technology and innovation. Despite a decrease in funding in 2023 compared to the previous year, the number of funding rounds has remained consistent, indicating a sustained interest in early-stage innovation within the Web3 sector. The involvement of early-stage investors, such as corporate venture capitalists, suggests a growing focus on efficiency and cost-reduction strategies among founders.
The Indian Web3 landscape is witnessing the emergence of various trends, including perpetual decentralized exchanges, on-demand digital asset retrieval platforms, middleware infrastructure projects, and modular scaling solutions. Funding for these startups has come from both domestic and international venture capital firms, with active investors from regions like the US, UAE, and Southeast Asia. This funding has supported the growth and development of the Web3 ecosystem in India, positioning the country as a significant player in the global Web3 community.
India has also made significant strides in the Web3 developer community, with its share growing from 3% in 2018 to 12% in 2023. The country added 3.5 million developers to Github in 2023, showcasing one of the highest growth rates worldwide. The development community in India skews young, with over half of the developers joining in the past two years. Female participation has also increased, rising from 3% to 14% over the past five years. While the US still leads in terms of global Web3 developers, India’s growth trajectory has been impressive, with a 300% surge in developers from 2018 to 2023.
In the Indian Web3 landscape, Ethereum has been the dominant blockchain platform for infrastructure and DeFi projects, while Solana and Polygon have gained popularity in consumer-centric sectors like gaming and social platforms. Gaming and NFTs have emerged as leading use cases for Web3 developers in India, attracting 31% of the workforce, followed by DeFi and real-world asset applications at 21%. Meme coins like Dogecoin and Shiba Inu remain popular in the Indian cryptocurrency market, accounting for a significant portion of total holdings and consistently ranking among the top traded coins on Indian exchanges.
While India is a leading market for crypto, the total value of holdings remains lower compared to other developed and emerging markets. Bitcoin maintains its dominant position, accounting for about 18% of the market share, although it experienced a decline in value in 2023. Ethereum holdings have seen a significant increase since 2020, but also faced a decrease in 2023. The regulatory landscape in India has seen a positive shift, with regulators showing a more nuanced understanding of blockchain and cryptocurrencies. However, uncertainties regarding existing regulations and challenges from banks and regulators have led to the relocation of some Web3 projects overseas.
In the future, India is expected to adopt a regulatory strategy that collaborates with the G20 to establish international consensus on effective frameworks for the Web3 space. Simultaneously, the country is likely to develop targeted domestic regulations tailored to the specific needs of its Web3 ecosystem. The growing interest and investment in India’s Web3 sector, along with the country’s strong presence in the global developer community, position it as a key player in the evolving digital economy.
