Tether’s USDT stablecoin has surged to an unusually high premium on Indian crypto exchanges, trading 7%–10% above its dollar value over the weekend. The premium, which normally runs 3%–4%, reflects a demand-supply imbalance and thin local liquidity, according to executives at CoinDCX and CoinSwitch. CoinDCX’s Minal Thukral attributed the premium to local order-book depth relative to the global dollar reference price, noting that India is structurally a net buyer of crypto, causing local demand to outpace available sell-side liquidity. CoinSwitch’s Ashish Singhal emphasized that exchanges do not set prices manually; prices are determined by buyers and sellers. The spike followed an enforcement action by India’s Enforcement Directorate related to USDT payments, which may have led market makers to scale back sourcing USDT overseas, exacerbating the supply shortage. India’s crypto tax regime—30% flat tax on gains, no loss offset, and 1% TDS—has long contributed to market dislocations, making it harder for liquidity providers to operate efficiently.

Key facts

• USDT traded at 7-10% premium on Indian exchanges over the weekend.
• Executives attribute the premium to demand-supply imbalance and thin liquidity.
• CoinDCX and CoinSwitch say exchanges do not set USDT prices manually.
• India's Enforcement Directorate action against USDT payments may have tightened supply.
• India's crypto tax rules (30% gains tax, 1% TDS) contribute to market dislocations.