New Delhi, 28 March 2025
Crypto mining is the process that Bitcoin and several other crypto assets use to generate new tokens and validate transactions across a vast, decentralized network of specialized computers. These machines perform complex calculations—often referred to as solving cryptographic puzzles—to confirm and secure each transaction that gets added to the blockchain, which functions like a public ledger. In return for contributing their processing power, miners are rewarded with newly minted tokens, creating a virtuous cycle in which the network remains secure and the miners are incentivized to keep the blockchain running efficiently.
Countries like the United States, Canada, and Kazakhstan have already positioned themselves as leaders in this space, leveraging their energy resources, favorable regulations, and technological infrastructure. For instance, the U.S. accounts for 37.8% of the global Bitcoin hash rate, thanks to its cheap energy and deregulated markets, while smaller nations like Bhutan have tapped into their hydropower resources to establish sovereign mining operations. Moreover, Bitcoin mining has demonstrated its potential beyond financial incentives, as seen in Texas, where it has helped stabilize the energy grid, reduce dependence on gas peaker plants, and save consumers billions in electricity costs.
India, however, remains a fringe player in this booming industry. Despite having 11% of the world’s IT workforce and producing over 1.5 million engineering graduates annually, the country contributes less than 1% to the global crypto mining hash rate. This is not because crypto mining is banned in India—it isn’t. In fact, there are no explicit restrictions preventing individuals or businesses from setting up mining operations. However, regulatory ambiguity, high taxation, and a lack of supportive policies have stifled growth in this sector. For example, a 30% tax on crypto income and a 1% tax deducted at source (TDS) on transactions, introduced in 2022, have driven many startups to relocate to more crypto-friendly jurisdictions like Dubai, Singapore, and Estonia.
Yet, the potential benefits of the wider cryptotech industry for India are too significant to ignore. According to a 2022 report by NASSCOM and Hashed Emergent, a regulated expansion of crypto-tech market could create over 800,000 jobs and add an estimated USD 184 billion in economic value by 2030 through investments and cost savings—offering substantial opportunities for a country grappling with chronic underemployment among its youth. Moreover, while the specialized ASICs used in crypto mining cannot be repurposed for AI training like GPUs, the real synergy lies in managing large-scale data centers, hardware inventory, and dynamically adjusting power consumption based on external demand. This operational expertise can be leveraged across other high-demand digital sectors, amplifying India’s potential as a global cryptotech and data hub.
Energy is another critical dimension where crypto mining could be a game-changer for India. Mining operations require substantial electricity, but this demand can be met sustainably by leveraging the country’s growing renewable energy capacity. India aims to achieve 500 GW of renewable energy by 2030, and crypto mining could help monetize surplus solar and wind energy, particularly during off-peak hours. For instance, states like Karnataka, Tamil Nadu, and Gujarat, which have abundant renewable energy resources, could redirect excess power to mining facilities. This would not only stabilize the grid but also generate additional revenue for these states, providing them with extra budgetary resources for developmental programs.
Globally, there are successful examples of how crypto mining can be integrated with renewable energy. Norway, for instance, powers its Bitcoin mining operations entirely through hydropower, reducing carbon emissions while generating revenue. Similarly, Bhutan has harnessed its hydroelectric resources to mine over 12,000 BTC since 2019 and plans to expand its mining capacity to 600 MW by 2025. Even El Salvador, despite its small size, is developing Bitcoin City, a mining hub powered by geothermal energy from volcanoes. These examples demonstrate how crypto mining can drive infrastructure investment, job creation, and economic diversification.
States with abundant electricity, such as those in the renewable energy-rich regions of southern and western India, could experiment with crypto mining without waiting for central government approval. This could serve as a pilot to demonstrate the economic and infrastructural benefits of mining, potentially paving the way for a more supportive national policy framework.
In conclusion, crypto mining is more than just a speculative venture; it is a gateway to energy resilience, technological sovereignty, and financial inclusion. While India has yet to fully embrace this opportunity, its strengths—such as a vast pool of tech talent, growing renewable energy capacity, and democratic institutions—position it uniquely to lead the Global South in this digital revolution. The question is not whether India has missed the opportunity, but whether it will act decisively before the window closes. By leveraging its renewable energy surplus in select states and fostering a conducive environment for innovation, India can still carve out a significant role in the global crypto mining landscape. The time to act is now.
