Tether (USDT) is commanding a significant premium on Indian exchanges, trading between $1.07 and $1.10 according to executives at CoinDCX and CoinSwitch, two of the country's largest crypto platforms. That's a sharp divergence from the roughly $0.999 price seen globally.
Both exchanges attribute the gap to a straightforward mechanics problem: more buyers than sellers, constrained by limited USDT flowing into India. "It's a supply-and-demand issue," executives told CoinDesk. When local USDT reserves run thin relative to buyer interest, traders willing to buy at the premium have nowhere else to turn.
This kind of premium typically persists when three conditions align: high demand for stablecoins in the local market, difficulty importing fresh supply, and minimal arbitrage pressure to flatten the spread. India's crypto market has grown substantially, but the on-ramp infrastructure to fill USDT pools remains bottlenecked.
The risk for traders is immediate. Buying USDT at a 7–10% markup means eating that premium loss the moment you move it to an exchange where it trades at parity or deposit it to earn yield on chains where the price is $1. For large trades, that's real capital efficiency loss.
For exchanges, the premium signals opportunity and constraint in equal measure. It reflects genuine demand from users seeking a dollar-pegged asset, but it also reveals how fragile local liquidity is. A flush of new USDT inflows would likely compress the spread fast. Until then, the premium remains a tax on Indian traders who need the stablecoin.