Crypto futures now account for more than 80% of trading volume on Indian exchanges as traders move away from spot markets following the country’s tax rules, according to data cited by Moneycontrol.
The change traces back to India’s 2022 tax framework, which introduced a 1% tax deducted at source (TDS) on spot crypto transactions. While the levy applies to every spot trade, crypto futures are not subject to the same deduction, making them a cheaper option for active traders who place dozens of trades each month.
Domestic exchanges estimate daily crypto trading volume has climbed to nearly $5 billion, with derivatives leading most of the activity.
BREAKING: 🇮🇳 Over 80% of India’s crypto trading volume is now in futures, per Moneycontrol.
• Reason: 1% TDS on spot trading (not futures).
• 70–80% of crypto derivatives traders are losing money.
• Retail investors account for ~70% of crypto futures trading. pic.twitter.com/KznbpGw5kl
— Crypto India (@CryptooIndia) July 15, 2026
Heavy retail losses raise fresh concerns
The rapid growth has come with mounting losses for retail traders. Internal exchange data suggests that 70% to 80% of crypto futures participants are currently losing money.
Unlike India’s regulated equity derivatives market, crypto derivatives operate without oversight from the Securities and Exchange Board of India (SEBI) or the Reserve Bank of India (RBI). Some smaller exchanges reportedly offer leverage of up to 100 times, far above the five-times leverage limit permitted in India’s stock derivatives market.
Legal experts have argued that the growing market now warrants clearer oversight, especially as leveraged trading continues attracting retail investors.
At the same time, roughly three-quarters of Indian crypto trading is estimated to take place on offshore exchanges such as Binance and Bybit, allowing many traders to avoid domestic tax rules altogether.
Did the tax policy create the market it wanted to reduce?
India introduced higher taxes on crypto trading to discourage speculation and improve tax compliance. Instead, the policy appears to have changed where traders place their bets.
Rather than reducing activity, many traders moved from spot markets into futures, where the 1% tax deducted at source does not apply. Others moved their activity to overseas exchanges outside India’s tax reporting system.
The result is a market where the fastest-growing segment carries higher leverage, fewer investor safeguards, and less visibility for regulators. If India proceeds with crypto regulation, derivatives are likely to receive as much attention as spot trading, since that is now where most market activity takes place.
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