Forex Margin Trading in India?

#1
Hello, does anyone know whether an Indian resident can open a forex trading account or not?

I am confused whether retail investors like me can open an Indian account and trade online?

Should I send money to a foreign account and do it through a foreign brokerage firm, or can I do it domestically?
 

duster

New member
#2
Hi!

As for the account opening - anybody can open it, the process of opening an account is not mentioned in any national laws. The question is how to add or withdraw funds? This is the area moderated by the Indian Government! Why is it moderated? Because currency exchange is involved! Most traders are interested in pairs like USD/EUR because they represent real market economy giving much more opportunities for efficient analysis. However, Indian rupee is an isolated currency - there are strict limitations on how to get it or how to get rid of it. :).

Most probably, you will have to make a wire bank transfer to a foreign bank. As per RBI regulations, you're allowed to make transfers up to 200,000 USD per year without any justifications.

As per domestic retails brokers - I don't know any. If you find one - please let me know!
 
#3
Its allowed

Forex trading is allowed for Indian residents, as long as amount you are sending outside the country is less than 200,000 USD.

The funding can easily be done via paypal.

I have been trading forex successfully for past 2 years now.

If you need any help,please feel free to contact me.

~happy pipping :)
 
#4
u must be sure about ur statement but the jury still seems to be out on the legality of forex trading in india. would you mind sharing the source for this confirmation for the benefit of this forum's readers.
 
#5
Hi,

I am a new member here. I have been searching for an answer to this question for many months. As for as my knowledge gathered in this quest, both tradeprivate and traderwizard are right in a way.

We are allowed to transfer abroad 200,000 USD in a year for any purpose including investment. But there is a small clause in the RBI doc i had seen and it said some thing like "for any purpuse but not speculation" !!!. So there is an apparent confusion in the wording. We don't have a clear demarcation between investment and speculation. investment also is a kind of speculation but may be the bets are for long term !. This statement can be contested, of course.

So, we Indian residents can open forex accounts from retailers, but the transferred money can be questioned on grounds of speculative purposes. In my quest to clarify this, i came across many people who were actually trading with varying levels of success. But not even one is not absolutely clear of the legality. Many say, "We are using just couple of thousand dollars or a little more and we don't transfer huge sums, so its pretty small offense if at all its an offense".

If any body has clear answer to this question, please post here.
 
#6
If you need hedging against your export / import other positions / exposure in four major currencies:
1. USD
2. Euro
3. GBP
4. Japanese Yarn

You can buy or sell for up to 12 months future in :

1. MCX-SX
2. NSE Currency Futures.

There is no such positional limits as such in these exchanges.
 
#7
As mentioned above forex trading is perfectly legal in India and also funding is no problem anymore. Beside paypal you can use moneybooker or any other e-wallet. Also some banks would allow direct transfers.

The only problem is that by law you are just allowed to exchange Rupees to the amount USD 200,000 a year.

My tip, just maintain a multi-currency account with a large international bank, then you don't need to exchange back and forth.
 
#9
The new guideline of RBI specifically mentions about not trading retail forex through foreign brokers.

That raises a question....

To :willy: or not to :willy: trading.

I would say that gov't won't bother you if you are in trading under certain amount. However, if you are making large transactions you are in their radar for sure.

Don't take chances. Rather trade your funds with your friends / relatives who are overseas.
 
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