There are many people having this query, Is Forex trading legal in India? Forex trading can be both legal and illegal in India Confused ?? Well Forex trading is also known as currency trading in India where a decentralised Foreign exchange enables foreign currencies to exchange for a specific rate. Forex trading somewhat relates to equity trading but differs as in equity trading there is the share price and in Forex trading is the exchange rates. Foreign exchange is the exchange of one currency to another foreign currency, where one currency is the base currency and other is the quote currency. The base currency is the basis on which the exchange for foreign currency is decided.
Base currency is the domestic currency of the country where the trader resides and the quote currency is the one which the trader wants to deal with. For Example- The trader residing in India having the base currency of Indian rupees (INR) and quote currency of Dollars (USD) for United states.
Though the real question is whether forex trading is legal in India?
For some forex trading platforms, it is illegal and for some it is legal. No citizen in India can undertake any forex trading transactions through any online or elctronic trading platform. The RBI had proposed a circular in 2013 stating that overseas forex trading is prohibited through any elctronic or internet trading plaftorm.
Forex trading can be legal, if only done through registered Indian Forex brokers and is only legal if the base currency is of India i.e. a trader residing in India cannot deal with both the transactions being of foreign currencies.
There are even certain restrictions that the citizens of India cannot send funds overseas to any foreign exchange brokers.
In India there are some important rules and regulatuions set by RBI and SEBI to govern the activites of Forex trading. Depending on certain condition you can carry on the transactions, but under legal boundaries.
Being an Indian citizen, it becomes very important to carry all the forex trading transactions legally in India to not fall into circumstances of being penalised highly or imprisonment.
How can forex trading be done in India?
Before trading for foreign exchange in India, you must know the rules and regulations of central authorities governing the activities of forex trading that are RBI (Reserver Bank of India) and SEBI ( Securities exchange board of India). The first step is to open a forex trading account in India with a SEBI registered broker. Once the account is created, the trader can carry all its foreign exchange transactions through an authorised foreign trading platform.
Forex trading may have different rules, policies and regulations for different countries. A trader must have the perfect knowledge of it’s country’s rules before performing forex trade. Therefore a trader must comply wirth the rules of forex trading for their respective country to perform legally and never fall into troubles like imprisonment.
Forex trading can be risky but can be beneficial too. To ensure that you end up with benefits, get your forex trading connected through a Forex VPS. Forex VPS enables you to catch bullet speed to place your order. The loss occuring due to time differences can be eliminated through Forex VPS as it makes it happen in miliseconds