India’s local crypto exchanges get just 0.7% of inflows, Chainalysis reports

India’s crypto users send substantial value to centralized exchanges, but domestic platforms receive just 0.7% of exchange value in Chainalysis’s new regional report. Its Brazil chapter puts Brazil-based exchanges at 12.5% of inflows.

The contrast separates two business questions that adoption figures can blur: how much activity is associated with a country, and how much its domestic platforms capture. India’s transaction withholding can reduce the cash available for another trade. Its role in venue choice remains an operator explanation, rather than a measured cause of the split.

The findings appeared in Chainalysis’s CSAO chapter on Sept. 30 and Latin America chapter on Sept. 23. Their main annual reporting window runs from July 2025 through June 2026, while the share observations’ precise dates remain unspecified in the chapters’ prose. The new publications describe earlier activity, ending before October.

Chainalysis attributes $88.4 billion in centralized-exchange inflows to India-based users during that annual period, making India the largest such market in Central and Southeast Asia and Oceania. That activity can reach platforms based abroad.

The Indian chapter reports that domestic platforms’ share of exchange value received fell from around 7% to 0.7%, with a sharp decline in mid-2022. Brazil’s chapter describes a different trajectory: Brazil-based exchanges previously received 1.5% of inflows and now receive 12.5%.

Those percentages describe received value in Chainalysis’s exchange analysis. Executed trades, revenue and customer numbers measure other parts of a platform’s business. One deposit can fund subsequent trading, so the amount entering an exchange and the activity inside it answer different questions.

Whether the platform sample stayed unchanged also remains unspecified. The reported divergence supports a descriptive comparison; a synchronized annual market-share comparison would require matching dates and samples.

Brazil’s broader crypto economy recorded $252.5 billion in activity in the year ending June 30, despite contracting 1.6%. That total combines several kinds of activity and has a different scope from exchange inflows. An annual domestic-exchange dollar estimate for either country would require a share and inflow total with matching windows, samples and denominators.

Chainalysis’s general 2026 methodology assigns pooled service activity to user countries using website traffic. For that allocation, it adjusts traffic shares for income differences using the square root of GDP per capita. The chapters leave the detailed calculation of the domestic exchange shares unspecified.

The country assignment follows estimated users. This allows activity at an exchange based abroad to contribute to India’s measured market, while domestic platforms receive a small reported slice.

Chainalysis acknowledges that removing VPN and bot traffic is imperfect. The figures are estimates of geographically attributed activity, with that uncertainty built into the comparison.

India’s current section 393 sets 1% withholding on consideration for a virtual digital asset transfer paid to a resident, subject to applicable exemptions. The responsible payer deducts at the earlier of credit or payment.

The base matters: consideration is the amount paid for the transfer. Withholding is calculated against that amount, so a deduction can reduce available proceeds even when the transaction produces little gain.

Consider a ₹100,000 cash sale with consideration paid to a resident seller subject to the standard 1% deduction. Before fees or other adjustments, the seller receives ₹99,000, with ₹1,000 withheld toward tax. That ₹1,000 cannot immediately fund another purchase.

Another liable sale can generate another deduction, adding to the amount already withheld. The final tax calculation determines how those deductions are credited, while each applicable deduction reduces the proceeds immediately available.