Lack of regulatory clarity forces India’s Web3 talents out in search of new homes

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A new report from the National Association of Software and Service Companies (NASSCOM) has cited India’s lack of regulatory clarity as the reason behind the country’s shrinking Web3 talent pool.

The report pointed out that India has some of the strictest regulations for digital assets in the world, charging a 30% tax on the profits made by traders and mulling over a blanket ban in the past. NASSCOM notes that many Web3 developers and founders have been forced to look outside the country in search of greener pastures, with the United Arab Emirates (UAE) being the preferred destination.

NASSCOM recommends that industry players engage with policymakers to improve the sector while academic institutions are urged to offer certification programs to deepen the talent pool. 

“Clarity on policy will unleash multiple initiatives, and India can serve as the world’s sandbox in several public services and governance use cases of blockchain,” read the report.

NASSCOM has hailed India’s potential in the sector as one that could be the world’s leading hub for virtual currencies. The country already holds the title of the fastest-growing economy and has over 450 digital asset companies under its watch, of which four have obtained the rare status of being unicorns.

India was also listed as having 11% of the global Web3 talent pool, which NASSCOM says is the third biggest and fastest growing in the world. The non-profit industry association predicts that a growth rate of 120% can be expected within the next two years.

“Lack of policy clarity around VDAs leading to lack of confidence in founders and innovators, thereby forcing them to move their base to other countries is not only taking the market away but also the critical talent and expertise needed to sustain talent supremacy in this area,” said NASSCOM.

India is making steady progress

Although the data from NASSCOM appears to be grim and unappealing, a closer look reveals that the country is steadily tilting toward the adoption of blockchain technology. Finance Minister Nirmala Sitharaman disclosed that India’s blockchain adoption rates would climb to 46% in the coming years while several non-profits have begun encouraging the use of the technology.

To deepen the talent pool, some higher learning institutions have begun training and issuing certificates to individuals, while state governments in India are incorporating the technology into their day-to-day operations.

In the southern state of Telangana, a Web3 regulatory sandbox has been created to encourage collaboration between policymakers and industry players. In contrast, Maharashtra has deployed blockchain to improve the operations of its land registry.

Watch: The BSV Global Blockchain Convention panel, Law & Order: Regulatory Compliance for Blockchain & Digital Assets