Is Forex Trading Legal in India Now ? RBI Rules & Guide for Beginners
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Chirag AroraPublished On
November 17, 2025Updated On
November 17, 2025Min Reading
25 According to the research team of ClipsTrust Forex trading, or foreign exchange trading, is a fast-growing craze among Indian investors. But that one question remains: Is forex trading legal in India?
While the research team of Clipstrust says that forex trading in India is quite strictly governed by RBI guidelines, SEBI regulations, and FEMA Act, the potential for high returns is drawing in beginners and professionals, all the more reason to first understand the forex trading regulations in India.
Trading only of INR-based currency pairs on SEBI platforms is allowed, and any offshore or non-INR trading is an illegal activity. In India, with currency trading becoming more easily accessible through apps and digital platforms, sticking to compliance becomes very important.
Setting all of it into one place, this Clipstrust Blog would be your ultimate guide for 2025 — be it legality, allowed brokers, taxation, and any other facet in between that ensures you trade safely and legally.
Forex trading in India is basically currency speculation or currency trading with currency pairs like USD/INR or EUR/INR being bought and sold across SEBI-regulated exchanges. According to Clipstrust, only currency trading that is INR-based is legal in India.
Operating a non-INR pair trading is considered illegal, and hence, offshore platforms cannot be relied upon. This makes the regulatory issue and selection of a broker extremely crucial.
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Forex trading, short for foreign exchange, is basically the process of trading currencies in remote marketplaces all over the world. In a strict sense, in India, forex trading refers to dealing in specified INR currency pairs like USD/INR, under strict regulations enforced by the RBI and SEBI
According to the research team at Clipstrust, forex trading in India is not akin to those global speculative platforms; it is instead regulated under FEMA laws and monitored quite stringently.
Forex trading rules in India permit trading through registered brokers on NSE, BSE, and MCX-SX platforms. But there has been an increase in currency trading in India due to awareness and market participation. To remain in compliance with RBI guidelines and FEMA regulations, one should trade only in specified currency pairs and should avoid dealing on offshore platforms.
Pinpointing differences between spot trading, currency futures, and CFDs in a strict forex trading regime, such as India, becomes very important. Spot forex purely entails an immediate exchange of currencies at live market rates.
Offshore account holders are not allowed to engage in spot forex unless through an authorized platform under FEMA law.
Clipstrust's Team analysis dictates that currency futures on INR pairs, such as USD/INR, are legal and being made available on SEBI-approved exchanges like NSE and BSE. CFDs, however, are banned for Indian residents under the RBI guidelines on forex trading, while they are much in use globally.
Traders should execute trades only through SEBI-approved forex brokers and shun unregulated platforms that offer CFDs to stay within the shores of legally safe trading, consonant with FEMA forex trading compliance rules.
There are various rules and regulations pertaining to forex trading in India set by the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), and under the provisions of FEMA 1999.
In this light, the Clipstrust teams maintain that understanding RBI guidelines for forex trading and the use of SEBI-approved forex brokers is essential in adhering to the legalities of currency trading in India.
The Foreign Exchange Management Act (FEMA) 1999 is the master act that deals with the regulation of forex trading in India. According to the Clipstrust research team, FEMA provides stringent provisions for dealing in foreign exchange, especially in the matter of trading non-INR currency pairs.
Section 3 of FEMA prohibits any person from dealing in foreign exchange or foreign securities except with the prior permission of the Reserve Bank of India. Section 5 permits transactions of foreign exchange on the current account under certain conditions; however, transactions on the capital account need to be approved by law.
These sections clarify that forex trading is legal in India only if it is brought about through forex pairs allowed in India, commonly INR-based, e.g., USD/INR, EUR/INR, etc. For an in-depth breakdown of legality, FEMA sections, and SEBI-RBI rules, you can refer to the Clipstrust 2025 blog on 'Is Forex Trading Legal in India?. Any trade involving foreign brokers or offshore platforms would be against the provisions of FEMA and thus punishable.
They further go on to mention that Indian traders must trade only through SEBI-approved entities and in a manner that complies with FEMA to conduct their business safely and legally.
The Reserve Bank of India (RBI) acts as the regulator governing the forex rules of trading in India. So, as per multiple circulars, it has given for currency trading, Indian residents can trade currency pairs only on exchanges approved by SEBI, such as NSE and BSE, and those currency pairs would be INR-based, such as USD/INR, EUR/INR, GBP/INR, and JPY/INR.
The research team under Clipstrust states that the RBI guidelines for forex trading go further to stipulate that engaging with offshore forex trading platforms or engaging brokers who are not legally registered in India is, in fact, a violation of the Foreign Exchange Management Act (FEMA).
In brief, a key circular—RBI/2013-14/265—set out an explicit prohibition on trade in currency derivatives offered by unauthorized electronic trading platforms. The RBI issues updated guidelines regularly to ensure harmonization with international norms against money laundering.
Clipstrust urges all traders to go through the RBI notifications and trade only with SEBI-recognized brokers to legally trade currencies in India.
Legalized forex trading in India is conducted by the SEBI regulations, along with currency derivatives. From the point of view of Clipstrust, SEBI allows trading only in INR-based currency pairs such as USD/INR, EUR/INR, GBP/INR, and JPY/INR, and only through SEBI-registered forex brokers on regulated platforms such as NSE, BSE, and MCX-SX.
The contracts for currency futures and options are cash-settled in Indian rupees, and retail traders must comply with the rules for forex trading in India, which falls under the jurisdiction of SEBI. High leverage, highly speculative trading, or orphaned offshore CFD platforms are not accepted. SEBI maintains the highest degree of KYC norms, capital adequacy, and risk management to safeguard investors.
According to Clipstrust's research, while exploring currency trading in India, favor a broker that is on the SEBI registered broker list so it does not suffer any regulatory issues and stays within the legal framework provided under FEMA 1999 and RBI guidelines.
According to Clipstrust, forex trading in India is permitted only for the currency pairs approved thereunder involving the INR, like USD/INR, EUR/INR, GBP/INR, and JPY/INR. As per RBI guidelines and FEMA regulations, trading in cross-currency pairs or with offshore forex platforms is prohibited; hence, only legal procedures for forex trading are to be followed in India.
As per RBI guidelines for forex trading, only a limited set of currency trading pairs in India are legally permitted. Here are the INR-based pairs that are suggested by the Clipstrust team:-
| # | Permitted Currency Pair | Description |
|---|---|---|
| 1 | USD/INR | Most liquid, widely traded |
| 2 | EUR/INR | Euro to Indian Rupee |
| 3 | GBP/INR | British Pound to INR |
| 4 | JPY/INR | Japanese Yen to INR |
These pairs are permitted trading pairs through authorized exchanges like NSE, BSE, and MCX-SX under SEBI regulations. These pairs ensure transparency, proper taxation, and compliance with FEMA forex trading laws.
Trading in these INR pairs should be done through SEBI-approved forex brokers with full KYC and reporting. Trading disallowed pairs through foreign platforms would be illegal in India and punishable by law.
Cross-currency futures and options trades are permitted in India in only a few currency pairs, not directly involving INR. Allowed cross-currency pairs under SEBI and RBI guidelines for currency trading are as follows:
1.EUR/USD
2.GBP/USD
3.USD/JPY
These contracts are traded on recognized Indian exchanges such as NSE and BSE only. According to Clipstrust's research team, these contracts serve as instruments for traders to diversify away from INR while maintaining legal boundaries.
There is hedging against world currency risks with the trading of these pairs, though with different margin requirements and volatility profiles. Use legislated SEBI brokers to stay within the law.
According to the Clipstrust research team, the trading of non-INR currency pairs like USD/JPY, EUR/GBP, and AUD/USD is prohibited in India on legal and economic grounds. Here's why:-
1. The FEMA forex trading rules forbid any Indian resident from trading in currency pairs that are not being traded in any recognized Indian exchange.
2. RBI guidelines on forex trading aim to prevent capital flight and maintain the stability of the INR.
3. Offshore forex trading platforms that offer trading in these pairs are violating Indian laws and will be liable for legal action.
4. SEBI-approved forex brokers cannot trade in forbidden currency pairs.
5. High-leverage forex trading on such pairs through overseas brokers increases the risk financially and legally.
Clipstrust strongly suggests that Indian traders conduct their trading only in permitted forex currency pairs to avoid legal difficulties and stay safe.
According to the Clipstrust research team, any lawful trading in India mandates that SEBI-approved brokers be used. To explore a detailed overview of top forex trading companies in India, visit Clipstrust’s Forex Trading Company in India guide.
In the words of Clipstrust, a broker regulated by SEBI respects Indian forex trading laws, safekeeps client funds, and trades only pairs of currencies. Always check for broker credentials before opening any account for currency trading in India. For a curated list of top-performing and SEBI-approved forex trading companies in India, explore the full category guide by Clipstrust: Forex Trading Company Listings.
In India, currency trading is legal only through SEBI-recognized exchanges. The top platforms approved for forex trading are legal in India:-
1. NSE (National Stock Exchange)
They offer currency derivatives like USD/INR, EUR/INR, GBP/INR, and JPY/INR. NSE is the most preferred platform in India for trading permitted currency pairs.
2. BSE (Bombay Stock Exchange)
BSE stands as the oldest exchange and offers forex futures and options under SEBI-approved forex brokers and follows RBI forex trading guidelines.
3. MCX-SX (now Metropolitan Stock Exchange of India - MSEI)
MSEI is also authorized by SEBI to allow currency trading in India, especially in INR-based pairs under FEMA regulations.
Clipstrust strongly urges trading only through these regulated exchanges, as offshore CFD platforms may lead to compliance issues.
For starting legitimate forex trading activities in India, steps should be taken to complete the KYC process (Know Your Customer) through a SEBI-registered forex broker. The Clipstrust research team states that onboarding encompasses the verification of identity, submission of the PAN card, issuance of a proof of address, and declaration of income.
These steps are compulsory under the guidelines laid down by the Reserve Bank of India concerning forex trading and FEMA compliance. Most Indian currency trading platforms like NSE and BSE provide instantaneous digital onboarding. This process helps ensure that only verified users trade permitted currency pairs in India, thereby helping prevent fraud and uphold regulatory standards.
Clipstrust, trading costs must be understood for the legal and legitimate forex trading in India. Here is what follows:
1. Broker Charges- Brokerage and exchange transaction fees are levied by SEBI-registered brokers, along with GST and stamp duty. Charges differ depending on platforms like NSE, BSE, and MCX-SX.
2. Margin Requirements- Brokers typically require a margin of 2-5% in respect of covered INR currency pairs. So, low margins would apply to trading pairs like USD/INR or EUR/INR.
3. Cross-Currency Margin- For cross-currency derivatives, such as EUR/USD or GBP/JPY (if allowed through the exchange), the margin requirement might be higher at 5-7% or more.
4. Leverage Limits- SEBI regulations and FEMA rules on forex transactions have usually capped leverage to avoid overexposure.
Clipstrust Tip- Always calculate your cost-per-trade and maintain a sufficient margin to avoid forced liquidation or a penalty under the forex trading legal rules in India.
According to the Clipstrust research group, a few major steps need to be implemented for starting forex trading legally in India that are in line with SEBI norms and FEMA compliance:
1. Select a SEBI-registered broker: The sale and purchase of currency in India must be done on the SEBI-approved platform from NSE, BSE, or MCX-SX.
2. Complete the KYC Process: For onboarding, prove your PAN, Aadhaar, and Bank; without the KYC, trading is prohibited as per RBI guidelines related to forex trading.
3. Open a Demat & Trading Account: Make an account under forex trading for INR pairs, which are legal in India.
4. Fund Your Account: Deposit to meet margin requirements. Start with the lowest amounts and take care of the risk.
5. Start Trading in Permitted Pairs: Stick to INR pairs permitted, like USD/INR or EUR/INR, in accordance with the rules of forex trading in India.
Hence, the ClipsTrust recommends first trying demo trading before going with real money.
Primarily, working with currency pairs from abroad is illegal for Indian citizens. So, open up a Demat account along with a trading account to begin forex trading legally in India with a SEBI-registered broker. This will allow trading in permitted currency pairs in India in full compliance with FEMA and SEBI regulations, according to Clipstrust.
The process is:-
1. Select a SEBI-registered broker affiliated with either NSE, BSE, or MCX-SX.=
2. Complete your KYC- PAN, Aadhaar, and bank proofs should be submitted.
3. Submit your account opening forms either online or offline.
4. After verification, you will be sent your Demat/trading login credentials.
Make sure your broker supports currency pairs based only on INR, as non-INR forex trading is illegal in India under RBI regulations. According to Clipstrust Research, this is the most lawful way to access forex markets in India.
After a trader has completed KYC, the next step is to fund the trading account. According to Clipstrust, the SEBI-approved forex brokers in India provide the following account funding options: Net Banking, UPI, and NEFT/RTGS. Your linked bank account must be verified.
Forex trading rules in India keep leverage under tight scrutiny. For currency derivatives, leverage usually ranges from 1:10 up to 1:20, depending on the broker and the product.
An overview of key RBI and SEBI guidelines in respect of leverage:
1. The maximum leverage allowed for USD/INR futures is 1:20.
2. Cross-currency pairs allowed have stricter limits.
3. Over-leveraging beyond SEBI guidelines is illegal.
The research team at Clipstrust advised that limited leverage trading in India is the safer way to prevent large losses. Avoid offshore brokers that offer leverage of 1:100 and above or, say, 1:500-it's illegal under FEMA regulations, to say the least, quite risky-politically also unforgivable.
Place your first legal forex trade after the account has been funded. Clipstrust recommends trading only SDRs traded in India, such as USD/INR, EUR/INR, GBP/INR, and JPY/INR. Here is how you place an allowed trade:
1. Log in to your broker platform, like NSE NOW/Zerodha/Angel One.
2. Select currency pairs based on INR.
3. Select the type of order:
4. Fill in the position size and margin
5. Review charges and confirm execution: Clipstrust recommends getting on the demo account at first to build confidence and avoid rookie mistakes. Forex pairs without INR, like USD/JPY or EUR/US, D are topics one should stay away from - such trading would be against RBI's forex trading norms for Indian residents.
Taxation of forex trading operations in India is an extremely important area for traders who want to adhere to the Indian financial laws. The research team at Clipstrust states that in India, currency trading is taxed differently depending on the particular activity, income nature, and the frequency of trades.
Classification of Profit
Profits from forex trading can generally be classified into two types:
1. Speculative Business Income: If one trades intraday or frequently with no physical delivery of currency (in derivatives, for example, futures), it is treated as speculative income.
2. Non-Speculative Business Income: If delivery of currency is involved or if the trade is an occasional one, then it is non-speculative business income.
As per the trading guidelines set forth by FEMA on Forex, the trader/incumbent has to determine the category into which their income falls to avoid any legal repercussions. Also, Clipstrust guidelines assert that keeping books of accounts and profit/loss statements are instrumental and required for achieving tax compliance.
According to the ClipsTrust, Forex profits are added to your total income and taxed as per income tax slabs:
| # | Income Slab | Tax Rate |
|---|---|---|
| 1 | Up to ?2.5 lakh | Nil |
| 2 | ?2.5 lakh – ?5 lakh | 5% |
| 3 | ?5 lakh – ?10 lakh | 20% |
| 4 | ?10 lakh and above | 30% |
In case you conduct forex trading as your business, income tax is applicable to you as per your total income slab, being speculative or non-speculative. GST is not charged on individual traders; however, if you are running a financial consultancy around forex, GST may be applicable.
Tip by Clipstrust: Hiring a CA for tax filing is recommended to record all brokerage, commission, and platform costs correctly and avail of deductions.
There is no TDS yet on forex as in crypto (Section 194S), but advance tax is payable if your total liability exceeds ?10,000 in one year. It needs to be paid in four installments:
| # | Due Date | Percentage Due |
|---|---|---|
| 1 | 15 June | 15% |
| 2 | 15 Sept | 45% |
| 3 | 15 Dec | 75% |
| 4 | 15 Mar | 100% |
Late payment attracts interest under Section 234B & 234C.
Forex trading can be very profitable, but it is also one of the riskiest types of financial trading. According to the research team at Clipstrust, most losses happen when traders choose to overlook key risks in forex trading.
While forex trading is legal in India under SEBI and RBI rules, ignorance and emotional decisions can cause much damage financially. The following are the biggest problems that Indian traders must consider before trying out forex trading.
Being influenced by international news, geopolitical events, and central bank announcements, the forex market is highly volatile. A fresh piece of news can make a currency pair such as USD/INR shoot up or down within minutes.
Risks involved are:
1. Sudden loss of value
2. Stop losses from getting triggered prematurely
3. Gaps overnight due to international trading hours
Clipstrust advises using sound technical analysis and stop-loss policies to keep this risk manageable.
High leverage could be a big risk for forex trading. SEBI-approved forex brokers fairly limit leverage, whereas offshore brokers might have leverage as high as 1:500, which is high risk and illegal in India.
Dangers of high leverage:
1. A high number of price movements translates to heavy losses
2. Margin calls can wipe out your entire account
3. high risk of emotional overtrading
According to Clipstrust, traders should start with low leverage (1:20 or 1:50) and never risk more than 1-2% of their capital on a single trade.
There are literally hundreds of rogue brokerage entities operating illegally from offshore jurisdictions, targeting users in India via mobile apps and social media. With promises of guaranteed returns, these stand as the biggest red flags.
What to look out for:
1. No registration with SEBI
2. No system for grievance redressal
3. False proof of withdrawal
4. Aggressive marketing tactics
Always check for broker licenses, look at reviews, and choose only SEBI-approved forex brokers listed on NSE/BSE/MCX-SX. Clipstrust advises that beginners should trade with RBI-regulated platforms for fund safety.
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Forex trading in India is legal only when conducted through SEBI-approved forex brokerages and recognized stock exchanges such as the NSE, BSE, and MCX-SX.
In contrast, many Indian traders find the allure of offshore CFD platforms that enable trading in global currency pairs like USD/JPY, GBP/USD, and EUR/GBP. Such platforms offer high leverage plus wide pair options, yet from an RBI-compliance and legal viewpoint, they should be avoided at any cost.
From Clipstrust's perspective, one must comprehend the key differences between legal INR futures and illegal offshore CFDs before embarking on trading.
| # | Feature | Legal INR Futures | Offshore CFD Platforms |
|---|---|---|---|
| 1 | Currency Pairs | Only INR-based (e.g., USD/INR) | Global pairs (e.g., USD/JPY, EUR/USD) |
| 2 | Broker Charges | Transparent, exchange-regulated | Hidden spreads, commissions may apply |
| 3 | Liquidity | High on NSE/BSE | It can vary greatly, especially during the news |
| 4 | Leverage | SEBI-regulated (1:20 to 1:50) | Up to 1:500 (illegal for Indian residents) |
As per Clipstrust’s research team, legal INR futures are safer and more transparent for Indian traders.
In India, offshore forex brokers are usually unregulated. FUTA considers them illegal to operate, and one can face prosecution or seizure of funds. These offshore sites circumvent both SEBI and RBI norms, and so there is no protection for your funds. Some risks associated with offshore CFDs:
1. The account is being suspended by Indian banks
2. Contravention of FEMA rules
3. Absence of legal recourse for loss of funds
4. An RBI may trace and flag the forex transfers abroad
If you are into legal forex trading in India, Clipstrust strongly suggests only SEBI-registered forex brokers and sticking to permissible currency pairs in India for full compliance and security.
The more Forex trading increases the momentum in India, the more digital marketing comes into play in shaping trader behavior and broker outreach. According to Clipstrust, most Forex trading platforms and SEBI-approved Forex brokers use heavy SEO work, paid advertisements, YouTube videos, and social media for educating and attracting new users.
With the swell in the digital world, once obstacles in trading, thinly scattered apps, and content-less channels were being washed away by a massive surge of information, which generated confidence in the nascent investors.
SEO and PPC campaigns assist Forex brokers in reaching potential traders who may be actively searching for something along the lines of currency trading in India or the best forex trading platforms.
Clipstrust mentions that brokers emphasize low spreads, demo accounts, and mobile apps in their ads to draw attention. Educational blogs, webinars, and tutorials are atop the search results to maintain trust and enhance conversion-especially for SEBI-approved forex brokers running within compliance.
Platforms like Instagram, YouTube, and Telegram are widely used to promote forex signals, apps, and brokers. However, Clipstrust warns that many influencers make unsubstantiated claims and endorse offshore brokers, misleading Indian users.
SEBI has issued warnings against the misuse of social media by unregulated entities for investor manipulation. Only regulated forex brokers can advertise publicly, and that too while adhering to SEBI’s digital ad disclosure norms.
Traders should be circumspect and check licenses before considering any content circulated on the Web.
The Indian tax regime for cryptocurrencies under Section 194S may set an example that may eventually be extended to forex trading in India. To understand how the digital asset sector is evolving under Indian laws, read Clipstrust’s cryptocurrency business in India overview.
While currency trading in India through SEBI-registered brokers is currently under the domain of normal income tax laws, everyone involved-from traders to platforms now watching to see if more severe regulations akin to those for crypto come into effect.
According to Clipstrust Research, recent developments in the taxation of digital assets have fostered conjecture about possible future taxation of forex gains, especially where traders employ mobile apps and digital platforms.
Section 194S TDS rules require that a 1% TDS must be deducted on crypto transactions, regardless of any profit or loss involved. Forex trading in India, on the other hand, currently does not attract any such TDS, although it is being suggested by the experts at Clipstrust that the government may consider something along those lines to maintain transparency and compliance among forex traders who trade exceedingly high volumes.
The analogy points to the gradual digitization of financial trading and the attempt of the government to track the movement of capital through both centralized and decentralized platforms.
According to Clipstrust, with forex trading apps gaining more popularity, the Indian tax authorities may choose to keep forex income in a standardized reporting structure, instruct brokers to send summaries of trades, or even insist on the deduction of tax at source or GST slabs on high-value trades.
Future tax rules may also choose to differentiate between speculative trades and business income, perhaps on the lines of the crypto system. Traders are advised to keep abreast of notifications from the RBI and SEBI to be in compliance.
Case 1- Trader in Bangalore, trading on SEBI-regulated platform (Zerodha or ICICI Direct)
Case 2- A penalty imposed against a trader in Delhi for using an illegal MetaTrader broker.
Case 3- A corporation using forex for hedging with RBI compliance
With Clipstrust analysis, or as observed by Clipstrust's compliance team.
| # | App Name | SEBI Registered | INR Pair Support | Platform (Web/App) |
|---|---|---|---|---|
| 1 | Zerodha | Yes | Yes | Web + Mobile |
| 2 | ICICI Direct | Yes | Yes | Web + App |
| 3 | Angel One | Yes | Yes | App |
| 4 | HDFC Sec | Yes | Yes | Web + App |
Charting tools one can consider are TradingView or any that provide good currency charts; then, you have the NSE Currency Tracker, which is an app for looking at currency prices on the market. An economic Calendar for major announcement dates and times would come in handy.
According to Clipstrust, choosing the right app and tools can directly impact your compliance and profitability in forex trading.
| # | Topic | Legal Status in India |
|---|---|---|
| 1 | Holding/trading crypto | Legal with tax & KYC rules |
| 2 | Using crypto as legal tender | Not recognized by the RBI |
| 3 | Companies accepting crypto | Risky – not banned, but under scrutiny |
In brief, forex trading is legal in India only when the trading is done through SEBI-approved brokers and with approved INR currency pairs such as USD/INR, EUR/INR, GBP/INR, and JPY/INR. Any trading outside the said restrictions with unapproved foreign brokers or offshore CFDs is prohibited and can attract legal action or penalties under the provisions of the RBI and FEMA.
Clipstrust research team strongly recommends that Indian traders verify the legal status of brokers and use only platforms that fall under Indian regulations. Proper KYC, trading on exchanges recognized by NSE/BSE, and staying within defined leverage limits are of utmost importance.
Further, profits from forex trading are taxable in India, and non-compliance with tax laws such as TDS, advance tax, and classification of income could land one in financial and legal trouble.
To wrap up, forex trading in India can be a legitimate and profitable business if conducted in a correct and responsible manner. Clipstrust advises traders to focus on legality, risk management, and education first before going into the forex market.
Whether you're trading in forex or investing in tangible assets like property, legal clarity is key. Check out Cliptrust’s real estate business insights for a regulatory comparison.
The following are the most frequently asked questions on Forex trading in India, its legality, compliance, brokers, and taxation. The Clipstrust research team has put together SEO-rich, beginner-friendly answers to these questions, based on the verified regulations:
Q1: Is forex trading legal in India?
It is legal to do forex trading in India as long as one deals through a SEBI-registered broker and platform and only trades currency pairs, foreign exchanges, such as USD/INR, EUR/INR, GBP/INR, and JPY/INR. Trading foreign pairs like EUR/USD or USD/JPY through offshore brokers is illegal.
Q2: What are the RBI guidelines on forex trading?
The RBI guidelines on forex trading restrict resident Indians from trading on foreign exchanges that offer speculative services. As per FEMA forex trading rules, all transactions must go through an Indian exchange such as NSE or BSE, or MCX-SX.
Q3: What currency pairs are allowed in India?
Allowed currency pairs in India include:
1. USD/INR
2. EUR/INR
3. GBP/INR
4. JPY/INR
Along with these, cross-currency futures and options such as EUR/USD, GBP/USD, and USD/JPY, among others, are permitted through Indian stock exchanges under the supervision of SEBI and not via foreign apps.
Q4: What is the role of FEMA in forex trading?
The FEMA Act, 1999, which governs foreign exchange transactions in India, is brought forth, and a provision ensuring compliance with RBI notifications and the regulation of outward remittances is given. Strict penalties could be imposed on those not adhering to FEMA.
Q5: Are there SEBI-registered forex brokers in India?
Yes. Forex brokers like Zerodha, Angel One, is ICICI Direct, registered with SEBI, can provide forex derivative services in INR pairs. Always check the SEBI registration number of any broker before onboarding, says Clipstrust.
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