Raghav Chadha Urges India to Legalize Crypto as Startups Exit Abroad

Raghav Chadha Advocates for the Legalization of Cryptocurrency in India

The Indian government has been asked by Raghav Chadha, an Aam Aadmi Party MP, to legalise cryptocurrency trading and innovation, as failure to do so may result in further economic harm from continued regulatory uncertainty. Speaking in Parliament, Chadha said that India’s negative position on crypto has made more than 180 startups leave the country for other nations that allow for such trade.

This move has once again brought up discussion on the delayed crypto policy framework in India, as lawmakers are under increasing pressure to deal with capital flight and lost innovation.

Startups Leaving, Capital Moving Offshore

Chadha disclosed that the absence of explicit laws concerning cryptocurrencies has compelled Indian entrepreneurs to move their businesses to jurisdictions that are favourable towards digital assets, such as Singapore, among others. According to him, these startups, which were established in India, now provide employment, pay taxes and contribute intellectual properties to other countries.

Chadha claimed that Indian traders have transacted about ₹4.8 trillion in crypto assets, a large portion of which is done through foreign exchanges and offshore platforms due to strict domestic regulations. “Crypto has not stopped,” he said. “It has simply moved out of India.”

Criticism of Policy-by-Discouragement Approach

At present, India heavily taxes crypto profits but does not give any form of legal recognition to it; a situation which critics call regulation without legalization. This approach, according to Chadha, does not promote compliance but rather drives underground activities and leaves consumers at risk.

He pointed out that globally there are advancements in crypto innovation, blockchain development and Web3 infrastructure, while India may fall behind despite having one of the biggest populations of developers and retail users.

Economic and Strategic Implications

Policy experts argue that Chadha’s remarks represent wider industry fears. The country’s crypto programmers are highly sought after internationally, and any further indecision could undermine its strength in areas such as financial technology, electronic payments, and blockchain-based systems.

Chadha also noted the paradox whereby Indians engage in active trading of cryptocurrencies, but the government gets no oversight or economic returns when this happens through foreign territories.

Growing Calls for a Clear Legal Framework

Chadha called upon the government to move away from discouraging practices towards planned legalization that includes transparent licensing norms, investor protection measures, as well as compliance conducive for innovation. He added that such a structure would retain startups, draw investments and make the trading activity subject to Indian laws again.

Industry voices supported this view by pointing out that legalization is not synonymous with lack of control; rather, it enables better enforcement mechanisms, ensures transparency and promotes economic involvement.