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Web3 Startups: Technology, talent and startups to help India’s Web3 rise

India’s rapid adoption of new-age technologies, its burgeoning startup ecosystem and vast potential of digitally skilled talent are the right building blocks to emerge as a major player in the global Web3 landscape, according to a report by the Association of IT Industry Nasscom.

In the first half of the calendar year, there were over 450 Web3 startups in India, with over $1.3 billion invested in Web3 since 2020, according to The India Web3 Startup Landscape: An Emerging Technology Leadership Frontier report.

Web3 uses peer-to-peer connections and a decentralized infrastructure to deliver the use cases that were generally centrally controlled in Web2, with opaque execution.

“A third of these startups have emerged in the past year alone, and some of them have a B2B model. Many of them are also working on areas outside of cryptocurrency like DeFi (decentralized 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 are well positioned to become a high-growth Web3 market, it said.

Web3 startups in India have grown about 6x since 2015.

While 82% of these startups were located in Tier I cities, the Tier II ecosystem grew rapidly across various Web3 applications, according to the report.

Indian Web3 startups are working on the development of diverse Web2 solutions for important application areas such as finance, decentralized communities, entertainment and infrastructure and not only for cryptocurrencies.

Most people only perceive and associate Web3 with cryptocurrency, and that needs to be addressed, Ghosh said.

“It’s important to apply the technology to other use cases to create a mindset shift,” he said.

It is important for both government and private companies to create and popularize low-risk use cases that will help Web3 technologies gain wider adoption in the near future, he added.

“The focus should initially be on the use cases rather than the technology,” he said, adding that it’s also important to take a slightly risk-based approach to regulation.

According to the report, most Indian Web3 startups have relocated their headquarters out of the country due to regulatory uncertainties and this needs to be addressed to strengthen the local ecosystem.

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