Rbi forex trading illegal

Rbi forex trading illegal

By: Basilz Date: 23.06.2017

Being from India, I had many doubts about legal aspects of Forex trading. So, I took the opportunity to investigate and find answers to if Forex Trading is legal or illegal in India. 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. Common and the most straight forward answer for this question is, of course: You can trade Forex in India with Indian Exchanges NSE, BSE, MCX-SX which offers Forex Instruments.

However, Indian Exchanges currently offer USDINR, GBPINR, JPYINR and EURINR pairs for trading purposes. 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. The foreign exchange market helps both international trade and investments through currency conversion.

For example, a business in the USA wants to import goods from India, the USA business has to pay for the imported goods in Indian Rupees, yet its primary income is in US dollars. Many retail traders may or may not know that the foreign exchange supports direct speculation.

The evaluation relative to the value of currencies, speculation based on the interest rate differential between two currencies. 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 access to currency derivatives is entirely legal. But, the Reserve Bank of India on the 10th of December allowed exchanges to offer cross currency futures contracts and exchange-traded currency options in three more currency pairs. The RBI allowed exchanges to offer cross currency futures contracts. The exchange-traded currency options in the pairs of EUR-USD, GBP-USD, and USD-JPY with immediate effect.

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. To counteract this outflow of US dollars, the Indian Government then forced to buy more US dollars, by selling INR at cheaper rates, leading to the devaluation of the INR. Hence, the simple logic why Forex trading in India is limited.

Assuming that you want to trade EURUSD, USDJPY or EURJPY or other possible combinations, but your local exchange does not offer such instrument. There is however a big disadvantage of trading Forex via crosses this way and it is the increase in transaction costs and there is often lack of liquidity.

Mark to Market on RBI currency trading rules

Meanwhile, you should note that CFD platforms are not legal in India, thus from a broader perspective trading on leverage is not allowed in India.

You as a trader should know your limits and act accordingly.

Is forex trading illegal in india? | Forex Peace Army - Your Forex Trading Forum

So far, the government has not really cracked down on retail traders however there has been major crackdowns on a number of brokers illegally operating in India. There has been regulated and unregulated brokers trying to establish their branches in India under different names, from education academies to training schools or consulting agencies.

These entities often get away with their activities from a few months to a few years until someone gets to report them to the local authorities. Such as the xDirect Indian office raid earlier in India is not the only country to restrict Forex trading.

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Indeed , Forex trading is restricted in about twenty countries globally. These countries promote propaganda to push their citizens away of Forex trading online or offline.

For India, trading on other pairs rather than defined by RBI is illegal under FEMA Act. With many online brokers who misguide retail investors claiming forex trading performed legally through them.

However, many India citizens believe that the main reason is to stop the currency outflow. I meanwhile, believe that RBI will ease in their limits in the coming period as India is going through the financial change.

We have some groundbreaking news about India Bitcoin regulation.

rbi forex trading illegal

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RBI warns against illegal forex trading on internet - Indian Express

All you need in Forex. India Bitcoin regulation news: Bitcoin will be legal in India. India Demonetization Impact- 50 day war against black money. How the Indian demonetization affects Bitcoin: Can you trade Forex in India? Forex Trading in India If you are an Indian resident and wish to trade forex, you cannot trade all the instruments as mentioned above.

rbi forex trading illegal

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Currency trading in India India Indian central bank Indian currency regulation Indian rupee Trading Forex in India.

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Fundamental Analysis and Economic Updates. Subscribe to AtoZ Forex exclusive updates! Bitcoin will be legal in India We have some groundbreaking news about India Bitcoin regulation. PayPal buyer protection policy supports online scam Most people talk about Paypal buyer protection, however few will comment about why and how Paypal buyer protection We use cookies to ensure you get the best experience on AtoZForex. List of Forex trading restricted countries are the following:

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