Legality of Forex Trading:
Yes, it is completely legal it can be done legally. Currently there are no interesting forex pairs with rupees to trade regularly. To trade in popular pairs like EUR/USD, USD/JPY etc. you need to first convert currency from INR to a foreign currency. RBI allows exchange of up to 200,000 USD per year without giving rigorous documents proof, but this currency exchange is not allowed for margin deposit with brokers.
So people who want to trade forex justify the currency exchange as ‘investments’. Another way is to ask a friend who is NRI/foreigner to make the money transfer.
Click here to see list of RBI FAQs.
List of Indian Brokers for Forex:
- Interactive Brokers- allows most popular pairs
- Alpari- allows most popular pairs
- ICICIBank – only with USD/INR pair
- Axis Bank – only with USD/INR pair
- Karvy Forex
- Angel Broking
- Swastik Forex
- G. Tibarewala & Co. (FOREX)
- L. C. Raheja Forex Pvt. Ltd
- Kotak Forex Brokerage Ltd
- Parekh (FOREX) Pvt. Ltd.
- Paterson & Co. Forex Brokers
- Sunidhi Securities & Finance Ltd.
- Forex4you
- Fxcentral
- XTB Online Trading
- MRC Markets
Reference Article: Preparation for Forex Trading- important basics
{ 34 comments… read them below or add one }
Dear Punit,
I was a forex trader for past 2 years.You are right when u say that “RBI allows exchange of up to 200,000 USD per year without giving any justifications, but this currency exchange is not allowed for margin deposit with brokers.”
So, the rule says that the money cannot be used to trade any leverage based products and can be used only for pure investment like real estate and equity which are non-leverage.I had been to RBI personally and verified this.The laws under FEMA and FERA are extremely rigorous.
Thus , trading forex is illegal here in india,although money ppl do it.For once, i was among them,until i realised the facts.
So, did you stop trading ? What did you do you for whatever you had earned from 2 years of forex trading ? Pl guide on this.
Just to add,u need to justify in the form,when u deposit currency and they do cross verify.
did u pay any fine..are u still trading forex..
Hey KK…
Consider trading on the account of non-earning family member for better tax planning… this can be called illegal *per se* or tax evasion. But practically a normal business practice.
Similarly about forex trading…
Yepp cross verification is needed and I need to correct my post… I’ll mention that rigorous documents verification is not required for exchanges currency upto 200k USD.
Punit, waiting 4 ur more posts
interactive brokers does not offer forex trading in india. when i contacted them this is wat they told me.
anyone has opened forex trading account with them?
thnx
The legality of forex trading is still a big issue, as rightly pointed by KKansara. That is why IB denies ‘per se’. You may like to talk with Alpari and others to find a way around the legal hassles.
Thnx for your quick reply. I really appreciate it.
I do have account with Alpari. But the problem is that their Currenex platform has min. deposit of 20000$. I guess we will have to wait till some more ECN or DMA brokers open up in India
With my recent discussions with few other professionals, I think one needs to take extreme care while doing forex trading… may God forbid but SEBI can take a year’s profit as penalty…
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please send me income from forex currency trading tax rules
please send me forex currency trading tax rules in india
See the mentioned list of RBI FAQs in article above.
help me plz i am a NRI ravinder i hv two ac in oman and italy so plz suggess me will it be legal for me to trading by those account plz hel me i will leave india after 15 dayes
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after reading all of yours views, i think, i should not start forex trading, i was just making my mind to enter in this business. reason, it is not legal here in india
thanks
Wow this is a great resource..
This legal part of forex trading is really interesting. Thanks for posting it. By the looks of the comments, many others think so too.
As a Newbie, I am always searching online for articles on forex. Thank you for the relevant information
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