There were over 450 Web3 startups in India as of the first half of the calendar year, with over $1.3 billion invested in Web3 since 2020, the report – The India Web3 Startup Landscape: An Emerging Technology Leadership Frontier – showed.
Web3 leverages peer-to-peer connect and decentralized infrastructure to deliver the use cases that have generally been centrally controlled, with opaque execution, in Web2.
“One-third of these startups have come up in the past year alone, and several of them have a B2B model. A lot of them are also working on areas outside cryptocurrency like DeFi (decentralised finance) and entertainment,” said Achyuta Ghosh, senior director and head- insights, Nasscom.
While the global response to Web3 is still evolving, India’s economic, demographic, and technology adoption factors position it well to become a high-growth Web3 market, it said.
Web3 startups in India have grown about six times since 2015.
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While 82% of these startups were in tier I towns, the tier II ecosystem was rapidly growing across various Web3 applications, according to the report.
Indian Web3 startups are working on creating varied Web2 solutions across major application areas like finance, decentralised communities, entertainment and infrastructure and not only on cryptocurrency.
Most people perceive and associate Web3 with cryptocurrency alone, and that needs to be addressed, Ghosh said.
“It’s important to adopt the technology to other use cases to bring about a mind-shift change,” he said.
It was important for both the government and private enterprises to create and popularise low risk use cases that will help Web3 technologies gain more widespread acceptance in the near term, he added.
“The focus should be more on the use cases rather than the technology initially,” he said, adding that it was also important to embrace a slightly risk-based regulatory approach.
The report said that most Indian Web3 startups had shifted their headquarters out of the country on account of regulatory uncertainty, and this needed to be addressed to boost the local ecosystem.
