The government has yet to announce new rules or modify its approach towards the Web3 industry, after it mandated registrations with the Financial Intelligence Unit – India (FIU-IND) for crypto firms last year. Despite the country’s gradual approach towards exploring the sector, the number of Web3 firms in India is gradually rising. In a recent report, the Bharat Web3 Association (BWA) notes that India’s Web3 ecosystem already comprises over 400 firms, while one state has emerged as the industry hub for the crypto sector in the country.
The report reveals that Karnataka has emerged as the hotspot for Web3 firms, housing at least 97 Web3 firms. Other states that are seeing a rise in Web3 firms in India include Maharashtra, Telangana, Haryana, and Uttar Pradesh.
Meanwhile, blockchain solutions emerged as the Web3 vertical with the largest concentration of companies operating within it, according to the report. Presently, 79 firms have been identified by the BWA for conducting research and development work around the use cases of blockchain technology.
This development, however, seems natural given that blockchain exploration is one Web3 field that the government has shown a keen interest in. India’s IT ministry has launched a suite of blockchain stacks for developers to safely experiment with the technology. Even TRAI has relied on blockchain technology to blacklist spam callers.
A total of 18.7 percent of Web3 firms in India are focussed on developing blockchain-based solutions to improve areas including supply-chain management, healthcare, and fintech among others. “We hope to quantify and bring attention to the start-ups contributing to the silent Web3 revolution in India,” said Dilip Chenoy, chairperson, BWA.
After blockchain services, the next most popular Web3 area is the exchange business for virtual digital assets. A total of 42 Web3 brands are working around VDA transactions – making for 42 percent of the total 422 firms.
Blockchain infrastructure companies, decentralised finance, gaming, and entertainment are other areas that are attracting entrepreneurs looking to establish Web3 businesses, according to the report.
“At Meity, we are committed to nurturing a Web3 ecosystem that is conducive to technological advancement while ensuring robust digital governance. The rise of Web3 technologies provides us with the opportunity to develop use cases that serve the public good through enhanced transparency while fostering a inclusive digital economy,” MeitY Secretary S Krishnan said in a statement included in the BWA report. “I believe Indian innovators hold the know-how to not just navigate this emerging space but the capability to lead it,” he added