Overseas Forex Trading From India – Legal or Illegal.
Does Overseas Forex Trading From India – Legal or Illegal.
Overseas Forex Trading From India is illegal for indian. Indian citizen can not send directly or indirectly fund to Overseas forex Brokers. Overseas forex trading through electronic / internet trading portals. As per RBI circular RBI/2013-14/265 A. P. (DIR Series) Circular No. 46 Overseas forex trading through electronic or internet trading portals not permitted.
If some one is found Trading in Overseas forex trading through electronic or internet trading portals by the Reserve Bank of India’s representative he or she is immediately charged of violation of law A ct (FEMA), 1999 & may send him to jail for illegal activity. RBI also found that many Overseas Forex brokers opens account in the name of individuals or proprietary concerns at different bank branches for collecting the margin money, investment money, etc. in connection with such transactions.
It has been observed By RBI that some banking customers continue to online trading in foreign exchange on portals OR websites offering such schemes wherein they initially remit funds from Indian bank accounts using credit cards or other electronic channels to overseas websites OR entities & subsequently receive cash refunds from the same overseas entities into their credit card or bank accounts.
Banks who offer online banking facilities or credit cards to their clients should advise their customers that any person resident in India collecting & effecting OR remitting payments directly OR indirectly outside India in any form toward overseas foreign exchange trading through electronic OR internet trading portals would make himself OR herself OR themselves liable to be proceeded against with for contravention of the Foreign Exchange Management Act (FEMA), 1999 besides being liable for violation of regulations relating to Know Your Customer (KYC) norms OR Anti Money Laundering (AML) st&ards.
Why RBI not allowed Overseas forex trading?
RBI had noticed that advertisement issued by electronic / internet portals offering trading or investing in foreign exchange with guaranteed high returns. Many companies even engage agents who personally contact gullible people to undertake forex trading/ investment schemes & entice them with promises of disproportionate / exorbitant returns.
The Reserve Bank of India cautions the public not to remit or deposit money for such unauthorised transactions. The advice has become necessary in the wake of many residents falling prey to such tempting offers & losing money heavily in the recent past.
Still Many Indian Trading in Overseas forex trading through electronic / internet trading portals.
Yes, It is right still so many indian peoples trading in overseas forex trading But actually they are in doing illegal activities. Nowadays RBI is very strict on this issue.
Does NRI Allowed to Trade in forex?
Yes, There is no restriction for NRI to trade in forex.
What is the Legal way for Indian to Trade in forex?
1) you can trade in Forex currency which is paired with Indian rupees. you can trade in MCX-SX, NSE currency segment. Currently four currency pairs are allowed(USD-INR, EUR-INR, GBP-INR, JPY-INR)
2) As likeOverseas Forex Broker Indian currency brokers also gives good leverage( Trading in USD-INR required only 1%-2% of margin).
Any questions regarding overseas forex trading pls feel free to write in below comments and get reply to your submitted id.
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15 Comments.
A am studying in phillipenes can I do online forex trading?
And can I send money to India.
Overseas forex trading by using online forex broker is illegal for indian.
Can I create a company overseas and trade in the name of that company from India with an overseas trader?
Any ways, Overseas forex trading by using online overseas forex broker is not permitted by RBI for Indian resident.
After opening the forex account can I fund my account from NRI who settled outside India?
Overseas forex trading with online Overseas forex broker is not permitted. So u cant open account if you are Indian citizen.
Forex trading is illegal in India but many offshore forex brokers have office in India and canvasing the client to open the account company like Bluemax capital, Hantech markets, Even forex. then what is the legal going too?
Decision is yours.
Transferring INR and receiving INR is not illegal. We have engaged with one indian bank. It will do every thing… One forex broker told me… Is it true. pls help me.
Thank you for sharing. I am still not sure if I should start forex trading in india or no.
I do accept as true with all of the concepts you have introduced to your post.
They are really convincing and can definitely work. Nonetheless, the posts are.
very brief for beginners. May just you please extend.
them a little from next time? Thank you for the post.
Can you suggest platforms dealing in INR pairs through which indian resident citizens can trade in forex?
Hello everyone one…
Till then i know.
4 inr pairs and according to 2015 fema act updating.
Are also allow for forex trading in India.
But my question is I have few overseas forex broker right..
Even I have no deposit bonus.
I do profit alot and save in my e-wallet.
So now my question is.
Regulated Indian forex broker.
If I deposited my fund from my e-Wallet which is I earn from else forex.
And I don’t even spend single penny of Indian rupees.
So after deposited in Indian fx broker.
Can I withdraw my money in local bank.
This way is legal to rbi or not?
Please, anyone, help me…..
please provide me the name of broker provide trading services in India and which are regulated in india. List of legal broker.
i’m a NRI residing in Dubai. I’m interested in Forex Trading, please help me with details.
Leave a Reply.
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Is forex trading permitted in india

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 .
I am not a legal expert, hence my answers in this short commentary is not written for lawyers but for ordinary people looking for Forex trading 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 .
First Question: Can you trade Forex in India?
Common and the most straight forward answer for this question is, of course: – “there is a will there’s a way”.
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.
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. 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.
“Writing laws is easy, but governing is difficult.”
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. These tradable instruments are EURINR, GBPINR, JPYINR, and USDINR.
But, the Reserve Bank of India on the 10th of December 2015 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.
Why is India limiting Forex trading?
To answer the question – “Why is India limiting Forex trading?” we need to look into the main reason behind the RBI statement.
So, let’s study the logic behind the Reserve Bank of India (RBI). When you trade EURUSD with “non Indian” traders/brokers, if and when you lose you would buy USD from RBI. This results in an increase in current account deficit (lack of foreign currency reserve). 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 .
Trading USD vs EUR in India.
You remember, above, I mentioned “there is a will there’s a way”, this is exactly true in case of Forex trading in India. Assuming that you want to trade EURUSD, USDJPY or EURJPY or other possible combinations, but your local exchange does not offer such instrument.
In this case, you may trade USDINR and EURINR that the INR gets eliminated and technically end up trading USD vs EUR. 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.
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. 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 2016.
List of countries Forex trading is restricted.
Belarus Bosnia & Herzegovina British Columbia (Canada) Bulgaria Burma China (Strict regulations and event total ban) Cuba Indonesia Ivory Coast Iran Liberia Macedonia Malaysia Montenegro Myanmar Nigeria North Korea Pakistan Quebec (Canada) Romania South Korea Sri Lanka (Recently relaxed) St. Helena Sudan Syria Ukraine Zimbabwe.
India is not the only country to restrict Forex trading. 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). Often you’d see some of these countries painting the picture for the west as evil.
For India, trading on other pairs rather than defined by RBI is illegal under FEMA Act. Trading forex in India through an online broker is a non-bailable offense in India. With many online brokers who misguide retail investors claiming forex trading performed legally through them. Moreover, RBI claims the restrictions are there to prevent retail investors/traders from losing big time. 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.
Think we missed something? Let us know in the comments section below.

is forex trading illegal in india? how to start forex trading 2017 – 2018 – RBI guidelines.
Is Forex trading illegal in india ? this is one of the biggest question into indian investor mind. Forex market is a decentralized market which cannot operate from one place like indian nse and bse market, its 24 hours a day from monday to friday. indian Forex market is open from tokyo then sydney, move through the asia market, then europe and finally closed in u. s markets on friday.
In forex market there are more than 44 international currency pair traded on the foreign exchange. There are many companies who are dealing in foreign currency trading operated from india illegally.
What are the legal route of doing forex trading in india?
Legal route of doing forex trading in India is only register dealer. You can do forex trading with the help of registered sebi dealer. Authorized dealers list can be found from sebi website ( sebi. gov. in/) . There is also legal way for doing forex trading in India as indian exchanges like NSE, BSE and MSEI that provides opportunities to invest in forex trading in India.
You should beware of fake dealers who claim high return of your forex investment money. Their only intention is to get money form 10 to 15 investors and fund away by making fool. In this way, all the investor may have to suffer loses.
You have seen many advertisement of forex trading that claim very good return on investment. These advertisements create temptation in MIMD of investors. Then, many people investors invest in forex trading without having of knowledge of it. Forex trading is like a “black box” for small investors. They find themselves trapped into a big losses schemes. This leads to them at a conclusion that forex trading is a scam. It is not true. If you good knowledge of investment , then you earn high return. I have seen many people who are consistently earning 30 to 50% return on their investment.
Today, we are going to discuss about myths about forex trading that are prevailing across India.
1. Forex trading is the easiest Way to earn high return on investment:
Money does not grow at tree. If you are looking for a way to become rich overnight, then forex trading is not for you. However, it does not that you cannot earn high return in forex trading. It is totally depends on the knowledge of investors, how he can use his mind in investment. have seen many people who are earning high return at consistency basis.
2. Forex trading give sure return on investment:
It is one of the biggest myth of forex trading. You should think twice before investing your hard earned money. There is equal risk in forex trading as other investment instrument has. There are approx 90% investors who try their luck in forex trading without having basic investment knowledge of it. They have to suffer loses. These are the people who began to think that forex trading is a scam due to losses. They have to make effort in right direction to understand the market. Now, it is clear that forex trading does not provide sure return. You have to make some efforts like other business.
3. 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. 53, dates 7 April, 2011, it is clarified that forex trading with online portal or digital portal are prohibited in India. It mean transfer money to a forex trading account with a broker who live abroad is violation of FEMA,1999.
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. Rbi circular rbi/2013-14/265 a. p. (dir series) circular no. 46 stated that overseas forex trading through electronic or internet trading portals is not permitted in india. Rbi believes that any type of margin trading is speculative in nature and in every speculation business there is 90% risk of losing money. So, if any Indian trader who trades in foreign currency like ‘euro’ or ‘pound’ and if that trader loose the money then he has to purchase the dollar from rbi in order to pay the loss amount, 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 lose money. In order to compensate the losses rbi will purchased more dollar from the market by selling inr in cheap rates. Thus, leads to devaluation of our inr.
Rbi also noticed that there are many companies in india who advertised through electronic and internet portals offering trading or investing in foreign exchange with guaranteed high returns. There are also many agents in india who worked for these companies and collect payments from them so as to transfer their funds outside india through illegal route and also offer their clients lucrative returns.
Does nri allowed to trade in forex?
Yes, rbi allowed nri’s to trade in forex market as there is no restriction for them. Also exporters in india can do forex trading but for hedging purpose as their profits mainly depend on currency movement.
what are the legal route for indian to trade in forex?
You can trade in forex currency which is denominated in inr means which is paired with inr. Currently, there are four currency pair traded in indian currency market i mean like usd-inr and jpy-inr etc.
rbi guidelines for forex trading in india :
if you live in india and want to do forex trading, then you should follow the reserve bank of india guideline for doing forex trading. you can also see the below snapshot that is taken from rbi website.
forex trading in india – rules and guideline:
now you have understood that forex derivatives is allowed by Indian law. Let us see the rules and regulation of derivative. The framework of doing trading in forex derivative is set by sebi and rbi. The legal guidelines is proved by Foreign Exchange Management Act. Below are the rules and legal route of trading forex derivative in india.
One can trade in currency derivatives if he is doing by recognized exchanges that are permitted by RBI and SEBI.
You can trade in 3 stock exchange markets – NSE, BSE and MCX-SX.
Currently you can trade in derivative by using pairs like pairs of rupees with Dollars, rupees with GBP, rupees with Euro and rupees with Japanese Yen.
Derivatives are traded on margin so it mean that you have to deposit intial margin money with exchange.
There is 3 months cycle for options and 1 to 12 months cycles for futures.
Top 3 Forex trading tips for indian investors – how should you do forex trading in india :
Forex trading has high return in comparison of other investment instrument in the world.
That is why mostly people attract towards it. Beginner try to achieve maximum returns. They think that they will become rich overnight in dealing with forex trading. But when they suffer big loss, then they realiase investing in forex market is not easy task. You have to keep many things into mind while trading In forex market.
So keeping these problems of beginners investors of forex market, we have written this article that will give you top 10 tips for investing in Indian forex market.
1.chose the trustworthy and honest broker:
To chose a royal and honest broker is one of the difficult task. If you have chosen right broker that suits your requirement of investment, then you have won the half battle.
There are so many fake brokers available in the market. You should aware of it and check the licence.
It is the valid proof of a broker in the market who is authored to deal in forex market.
2. Create your own plan:
No one can tell you all the forex trading tips. It is continue learning process. You should create own strategy and plan for investing in forex market in India. I have seen many people who create different plan for forex market investments. They learn while doing investment in market. Sometimes, they have to fave failure, on the other day , get success. So people make own plan for forex investment. Invest in small amount to learn the playing field. There is a saying that slow and steady always win the race.
3. Control the emotion and stress :
People find it difficult to control emotion when they loses some money while doing forex trading in India. Controlling stress is the one of the biggest tips of forex trading 2017.
if you like this article about is forex trading legal in india , then share it on social networking website like facebook, google plus and twitter.
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9 COMMENTS.
I want to invest in for ex treading in India. , but I do not know that rules AMD regulation of forex trading in India. I have read the RBI guideline but still confused. please clear my double about whether I can invest or not.
This text is priceless. When can I find out more?
legal route for forex trading in india is doing trading with the help of a register dealer. you can contact the sebi registered dealers. the list can be found on sebi website:- sebi. gov. in/
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Is forex trading permitted in india

Forex newyork close Blackdog forex peace army The forex life line pdf merger Ahmet turan forex Aprender acerca de forex Google finance forex market Forex careers india As per RBI circular RBI// A. P. (DIR Series) Circular No. 46 Overseas forex trading through electronic or internet trading portals not permitted. Legal. Indian Forex traders are not supposed to indulge in any currency pairs that does not involve the INR as the base or quote currency. The Indian Rupee is the official currency and the legal tender of the country, and it is illegal for Indian citizens to transact in any other currencies while they are in India. Under the Foreign. If you're a resident of India and you want to get into the world of trading forex, you may find some road blocks. In fact, one of the most commonly asked questions surrounding forex among residents of India is “Is forex a legal business or not?” The reason for this question is that there are big limitations on.
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