USDT Premium in India Surges to 8.5% After Government Crackdown on Crypto Payment Firms

The price of Tether’s USDT has climbed to an 8.5% premium on Indian cryptocurrency platforms after a government crackdown disrupted the supply of the dollar-pegged stablecoin into the country.

Over the weekend, USDT traded at around 102.88 Indian rupees, while the official dollar-rupee exchange rate stood near 94.65 rupees. Normally, the premium ranges between 3% and 4%, but reduced supply and strong demand have pushed prices significantly higher.

Government Raids Disrupt Stablecoin Supply

The sharp increase followed enforcement action by India’s Enforcement Directorate (ED), which raided six locations in Bengaluru on June 17 under the Foreign Exchange Management Act (FEMA). Authorities allege that five crypto payment firms facilitated more than $265 million in unauthorized cross-border transfers using digital assets.

According to investigators, the companies allowed non-resident Indians (NRIs) to send money through USDT instead of traditional bank transfers. Funds were deposited into company accounts, converted into stablecoins, transferred overseas, and later sold on Indian crypto exchanges, bypassing regulatory reporting requirements under FEMA and India’s anti-money laundering rules.

Supply Shortage Pushes Premium Higher

Following the raids, market makers and liquidity providers reduced purchases of USDT from overseas, tightening domestic supply and pushing the premium even higher. The disruption also affected crypto off-ramps, which allow users to convert digital assets into local currency.

Although Coinbase introduced direct Indian rupee payment rails last month to simplify crypto transactions, the recent enforcement action has placed fresh pressure on the infrastructure that supplies USDT to the local market, keeping prices elevated.