India Overtakes Singapore in Crypto Exchange Inflows

India received $88.4 billion in centralized crypto exchange inflows between July 2025 and June 2026, recording the largest centralized exchange inflows in Chainalysis's Central & Southeast Asia and Oceania region, according to a Chainalysis regional analysis published this week.The figure positions India ahead of Singapore's $82.3 billion and Australia's $79.3 billion during the same period, even as the country's broader crypto economy contracted by 14.7% to a total of $135 billion in overall activity.The Chainalysis data covered centralized exchange activity across Central Asia, Southeast Asia, and Oceania, with Vietnam recording $69.8 billion in inflows as the fourth-ranked market. India's dominance in centralized exchange volume comes despite a regulatory environment that imposes some of the heaviest tax burdens on crypto trading in any major economy, according to the report.

Offshore Platforms Capture Nearly All Indian Volume

Domestic Indian exchanges captured only 0.7% of local exchange volume during the period, far below the regional average of approximately 7%, the Chainalysis data showed. CoinSwitch co-founder Ashish Singhal told crypto.news that crypto in India is "predominantly being used as an investable asset" through buying, holding, and selling rather than for payments or decentralized finance applications.The dominance of offshore platforms has been linked to India's tax regime, with nearly three-quarters of the country's $6.1 billion crypto trading volume flowing to foreign exchanges, per Decrypt.The government introduced a 30% flat tax on virtual digital asset income and a 1% tax deducted at source (TDS) on transactions in the 2022 budget, with Finance Minister Nirmala Sitharaman retaining both levies unchanged in the 2026 Union Budget. Losses from crypto trading cannot be offset against other income, and no deductions are permitted beyond acquisition costs under the current framework.

Regulatory Enforcement Tightens Alongside Growth

India's Financial Intelligence Unit (FIU-IND) fined Binance 188.2 million rupees, approximately $2.25 million, for anti-money laundering violations before the exchange registered with the FIU and re-entered India in August 2024. Exchanges operating in India now face enhanced Know Your Customer requirements, including live selfie verification, geolocation capture, and bank account cross-checks, raising the compliance cost of serving Indian retail traders.Mudrex Chief Executive Officer Edul Patel noted that the Indian investor mindset has shifted from short-term speculation to accumulation, with crypto now held alongside equities, gold, and mutual funds. The Reserve Bank of India maintains a cautious stance on digital assets despite the growing inflow figures, and the 2026 budget reduced criminal liability for TDS defaults from seven years to a maximum of two years.

India’s Crypto Growth Has an Offshore Problem

India’s $88.4 billion in centralized exchange inflows shows that heavy taxation has not eliminated domestic demand for crypto. Instead, the Chainalysis data suggests trading activity has largely migrated away from local platforms, leaving India with one of the region's largest crypto markets but a comparatively small share flowing through domestic exchanges.That distinction matters for regulators as well as local trading platforms. If Indian investors continue favoring offshore exchanges, higher transaction volumes will not necessarily translate into equivalent growth for the country’s regulated crypto industry. India’s challenge is therefore no longer simply whether crypto activity will persist under its tax regime, but how much of that activity can be brought within its domestic regulatory perimeter.