Forex Trading in India – Legal or Illegal – A Critical Analysis

If everybody in India trades forex with Foreign brokers and traders outside India, with the notorious nature of trading where the majority of traders eventually lose, RBI stands to lose a substantial amount of US dollars.

I have also written about the Forex trading scams and what you should do to not get caught in one of the scams here. For this reason, no INR can leave the country. 

The RBI allowed exchanges to offer cross currency futures contracts.

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So, the government of India has not forbidden to trade Forex, but limited the trading for Indian residents to only trade currency pairs bench-marked against INR (Indian Rupee). As a an Indian resident, as long as you are trading through an Indian Brokerage, which allows access to Indian Exchanges such as the NSE, BSE, MCX-SX and providing .

Thus, this short research is based on a number of short talks with local experts, reading the government regulation on ETF trading and Futures trading to find out whether or not Forex Trading is legal or illegal in India.

Can you trade Forex in India? Common and the most straight forward answer for this question is, of course: Forex Trading in India If you are an Indian resident and wish to trade forex, you cannot trade all the instruments as mentioned above. Hence, in short global Forex market is like not so global in India.

Although, the foreign exchange forex market is decentralized global market to allow the trading of currencies buying, selling exchange of currencies , there are countries seeing this decentralized market as a sovereignty threat. Thus, due to sovereignty issues the Indian government has limited Forex trading in India. Why do we need the foreign exchange market? The foreign exchange market helps both international trade and investments through currency conversion.

You have to make some efforts like other business. RBI allow forex trading with coordination of some brokers: Today, you can see large number of online website that claim forex trading with approved RBI registration. You should beware of such kind of websites. According to RBI circular no. It mean transfer money to a forex trading account with a broker who live abroad is violation of FEMA, Now, the question arises why it is illegal?

As per the rbi guidelines indian citizen cannot send directly or indirectly fund to outside india for margin trading purpose. In order to compensate the losses rbi will purchased more dollar from the market by selling inr in cheap rates. As there is a big change in Indian economical condition, RBI must ease their limits in the coming period. To get the answer to this question we have to look through the statement of RBI.

RBI always tries to increase the foreign currency. In this respect, there is a big problem of forex trading. This increases the lack of foreign currency in reserve.

If all the people of India trade forex with foreign brokers and traders outside India and lost everything, RBI stands to lose a substantial amount of US dollars. This is the simple logic of prohibiting forex trading in India. In India, forex trading is not allowed. Involving in forex trading is legally considered as a crime.

In some cases, it is a non-bailable offense. An Indian can not trade in this pair. By paying dollars India is already buying crude and gold from foreign countries.

 

CoinAnalyst 

Currency trading is legal but only within predetermined ranges decided by the Reserve Bank of India (RBI) and Securities Exchange Board of India (SEBI). So, if one wants to trade in currencies in India, there are certain regulations that must be .

So, the government of India has not forbidden to trade Forex, but limited the trading for Indian residents to only trade currency pairs bench-marked against INR (Indian Rupee). As a an Indian resident, as long as you are trading through an Indian Brokerage, which allows access to Indian Exchanges such as the NSE, BSE, MCX-SX and providing . Trading in these contracts are legal in India. The market for these contracts have also become very liquid lately and it would be a good starting point for someone who want to test water of currency trading. 

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BehaviourExchange

The Reserve Bank of India and Securities Exchange Board of India regulate the forex trading in India. It is legal in India if the base currency is INR only, if the forex trade is taking place between two foreign currencies, it is illegal. Forex Trading In India Legal: If you are an Indian, you have some hesitation and contradiction about legal aspects of Forex Trading. So, I started so many investigations to find the right answer if Forex Trading is legal or illegal in India.

If RBI or the Indian Government thinks Forex trading illegal, you will not be seeing those Forex trading platforms and sites in India and you will not be seeing a host of Forex trading advertisements and links in search engines like Google in India. Jan 23,  · Is forex trading illegal in india? how to start forex trading, legal route of doing forex trading in india, forex trading in india rbi guidelines. this leads to reduction in foreign currency reserve. So, if everyone is trading outside india in foreign currency and assuming the speculative nature of the market, 90% of traders might 5/5.

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