The nation's new proposed tax law – which would impose a staggering 30% capital gains tax and a 1% tax deducted at source (TDS), coupled with an ongoing lack of clear regulation for crypto companies – may exacerbate this brain drain.

Industry participants have little hope that the current administration, headed up by Prime Minister Narendra Modi, will have a change of heart before the legislation is formally introduced into parliament this week.

Should India proceed with implementing its tax bill in its current form, industry advocates fear developers and startup founders will launch their products in friendlier jurisdictions, which would result in an acceleration of crypto brain drain from India.

Brain drain includes both entrepreneurs setting up shop outside of the country, and to a much greater extent, Indian developers joining companies based in crypto-friendly nations.

Viswanath claims to have met more than 200 Indian entrepreneurs in crypto. “Not even 10 said they would register their companies in India. The entire ecosystem is moving.

The policy expert argued that the “exodus” is similar to the brain drain in India’s IT industry, which has witnessed this phenomenon for 30 years.

The third factor contributing to the exodus is external forward thinkers – crypto-friendly nations beating India and “whales,” or large crypto investors, happy to set up shop outside India.

India is very rich in talent. Most tech-savvy people are here. So, if India gets the right crypto framework, it can be the next Silicon Valley,” he said.