The crypto market in India is witnessing an unprecedented surge as thousands of people—particularly young workers—turn to Bitcoin, Ethereum, and Dogecoin in an attempt to escape stagnant wages and a brutal job market, according to a report from Reuters.
This isn’t only happening in major metros like Mumbai and Delhi. Small cities Jaipur, Lucknow, and Pune are seeing a surge in crypto adoption too, as more people look for ways to supplement their income amid slow economic mobility.
Ashish Nagose, a 28-year-old flower shop owner in Nagpur, started trading crypto two months ago after attending a local trading school, according to Reuters. For him, it’s about survival. “I want to run my family shop, and hope that trading can provide a steady income when business slows down, like in the month after Diwali,” he reportedly told Reuters.
Institutional interest in crypto increases
But the enthusiasm for crypto isn’t limited to retail traders. Institutional interest is rising, and India’s crypto market is projected to reach $15 billion by 2035, up from $2.5 billion in 2024, according to Grant Thornton Bharat. The estimated compound annual growth rate is 18.5%, which is pretty high.
The biggest surprise in India’s crypto explosion isn’t just the numbers—it’s where the trading is happening. Data from CoinSwitch, one of the country’s largest crypto platforms, shows that seven of the top 10 crypto-trading cities in 2024 were lower-tier cities.
“Growth is now being driven by non-metro cities. That’s true for the stock world, and it’s true for crypto,” said Balaji Srihari, vice president at CoinSwitch, which has 20 million users.
One of those traders is Sagar Neware, a 25-year-old mechanical engineer in Nagpur. By day, he earns 25,000 rupees ($288) a month working at the local transport office. By night, he trades crypto, hoping to reopen his father’s plastic packaging business, which shut down a few years ago.
“My father had to shut down his plastic packaging business a few years back, so my first dream is to restart it with the money I can earn from trading,” Neware said, according to Reuters.
To sharpen his trading skills, Neware attends a small school where two dozen people meet each weekday to learn technical analysis, risk management, and crypto market psychology. The school’s owner, Yash Jaiswal, has tutored 1,500 people in just two years. Inside the classroom, a poster reportedly reads: “You’re just one trade away from your dream life.”
India has still not clarified its crypto regulatory stance
Despite the explosion in trading, India’s crypto industry still operates in a legal gray area. Unlike most G-20 countries, India has neither introduced new laws governing digital assets nor folded crypto into existing financial regulations.
The government has imposed a 30% tax on crypto trading gains, one of the strictest tax regimes globally, but hasn’t taken any more steps to regulate exchanges or investor protections. India’s market regulator has indicated interest in overseeing the industry, but the government has yet to issue formal guidelines.
“Widespread usage of crypto assets and stablecoins has consequences for macroeconomic and financial stability,” it said in its Financial Stability Report in December 2024.
Trading volumes on India’s four largest crypto exchanges (WazirX, CoinDCX, CoinSwitch, and Kucoin) doubled in just three months, hitting $1.9 billion in Q4 2024, according to data from CoinGecko.
India may have 1.4 billion people, but the actual number of consumers with disposable income is shockingly small. According to a new Blume Ventures report, only 130-140 million Indians—roughly the size of Mexico’s population—form the country’s true spending class.
Another 300 million people are in an “emerging” or “aspirant” category, meaning they spend cautiously and only recently started making discretionary purchases, thanks in part to the rise of digital payments.
But here’s the real problem: India’s consumer base isn’t expanding—it’s concentrating at the top. Instead of more people getting wealthier, the already-rich are getting even richer.
How India’s spending habits are changing
This shift is fueling a “premiumization” trend across industries—companies aren’t focusing on selling to the masses anymore. Instead, they’re doubling down on high-end products for the wealthy.
The proof?
- Luxury real estate is booming. Five years ago, affordable homes made up 40% of India’s housing market. Today, they’re just 18%.
- Premium smartphones are selling fast, while cheaper models struggle.
- Branded goods are taking over, replacing unbranded or budget-friendly options.
- The “experience economy” is thriving—concerts by Coldplay and Ed Sheeran are selling out instantly, despite ticket prices being far from cheap.
Companies that have adapted to this new reality are thriving, says Sajith Pai, one of the report’s authors.
“Businesses too focused on the mass market, or without a premium product line, have lost market share,” he told the BBC.
The rich got richer, the poor got squeezed
The report confirms what many economists have suspected: India’s post-pandemic recovery has been K-shaped—meaning the rich have gotten richer, while the poor and middle class have lost purchasing power.
But this isn’t just a pandemic trend. India’s income inequality has been worsening for decades.
- In 1990, the top 10% of Indians controlled 34% of the nation’s income.
- Today, they control 57.7%.
- The bottom 50% saw their share shrink from 22.2% to just 15%.
Now, even those in the “emerging” middle class—who previously borrowed heavily to fund their spending—are feeling the squeeze.
India’s middle-class spending power is collapsing due to a mix of:
- Stagnant wages: The middle 50% of India’s tax-paying population has seen no real income growth in over a decade, according to Marcellus Investment Managers.
- A sharp drop in financial savings: Indian households’ net financial savings are at a 50-year low, according to the Reserve Bank of India (RBI).
- Rising debt: Many middle-class families took out loans after the pandemic, but now credit is drying up as the RBI cracks down on unsecured lending.
Pai warns that turning off easy credit will hit spending hard.
“Aspirant consumers were relying on borrowing. Cutting off that tap will definitely have an impact,” he said.
Short-term fixes—like a record harvest boosting rural incomes and a $12 billion tax break in the latest budget—could provide a slight lift to India’s consumption-driven GDP.
But the bigger picture isn’t as rosy.
The government’s own economic survey warns that job losses from AI and automation could further erode middle-class spending.
White-collar urban jobs are already becoming scarce, and supervisory roles in manufacturing have declined significantly.
“India is a consumption-based economy,” the report says. “A fall in consumption due to job displacement could have serious macroeconomic implications.”
If the worst-case scenario plays out, India’s economic growth trajectory could go off course.
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