What is Forex Trading in India? Legal or not?

Few days back I received a message from a company representative on Facebook, forcing me to offer the “INTERNATIONAL BUSINESS OPPORTUNITY” called FOREX TRADING to my client. She claimed returns ranges from 8% to 95% within a month. So let us look at this offer whether this is the legal or not.

TradingForex trading in India is illegal where there is no involvement of Indian Rupee. You can trade with involvement of Indian Rupees like USDINR, EURINR, GBPINR or JPYINR.

The reason for sharing this information with you all is, in future you may be under such trap. So thought to share this information and making you aware about what actually are Indian regulations about this Forex Trading. Below is the interesting discussion. (Name of executive and Company she represents changed.)

Company Executive-Hello sir, I am Shilpa here. Working for a Multi National Company named ABC Consultant. I got to know that you are the financial planner, so I wanted to discuss with you business proposal regarding international Commodity and currency trading!!

The profits you earn is in Dollars and the returns ranges from 8% to 95% within a month. This is the only industry where you can earn huge profits in short terms.

I will be looking forward for your reply sir!

Basavaraj-oh sure…let us start now

Company Executive-Can you please send me your contact number so that I can call you up and explain the overall picture of ABC.

Basavaraj-Let us discuss first the regulatory issue…. Under which regulation this trading will be performed?

Company Executive-we are group company of the ABC International Consortium (HIC), ABC is a registered member of the Indonesia Regulatory Agency.

Further ABC is also registered with : BAPPEBTI Member of The Indonesian Derivatives Clearing House Member of Jakarta Futures Exchange Member of the Commodity Trading Board With sanctions obtained for Overseas Transactions, HIF we can now offer our clients a broader spectrum of trading and investment opportunities.

Basavaraj-I am asking you, to operate in India under which regulation you are registered? Who regulates the trade generated in India? Forget about the Indonesia or other countries, I am living in India and let us discuss who bonds these transactions?

Company Executive-Sir we have our headquarters in Jakarta, so we are directly regulated by the exchange.

Resident Indians can trade in currency through various Indian financial institutions today However, currently the resident Indians cannot trade in currency pairs not involving the Indian Rupee, (like the USD/GBP) with any scheduled bank or such other agency falling under the regulatory purview of the Reserve Bank of India Therefore to trade in such currency pairs, one will have to transact Foreign Exchange trades outside India.

Basavaraj-Jakarta is ok…but money is going to be invested from India…. and you are claiming that youΒ have an office in India. So ultimately you will come under regulatory. So who regulate you people? Or in future my transactions?

Company Executive-RBI, through the provisions under A.P.(Dir Series)Circular No.64 dated Feb 4,2004, Circular No.24 dated Dec 20,2006, Circular No.51 dated May 8,2007, Circular No.9 dated Sept 26,2007 and Circular No.05 /2009-10 dated July 1, 2009 granted permission to Resident Individuals to freely remit up to USD 200,000 per calendar year for acquiring and hold immovable property, to invest in stocks, shares, exchange traded funds, debt instruments, stock options and index options outside India without prior approval of the Reserve Bank of India. Individuals can also open, maintain and hold foreign currency accounts with a bank outside India for making remittances under the Scheme without prior approval of the Reserve Bank.

Basavaraj-so you are claiming to be no one will regulate and according to the law of land this is not legal right?

Company Executive-It is legal, we are doing CFD i.e., contract for difference In India forex isΒ Not legal but not CFD We bid and ask only for the price difference

Basavaraj-From the above reply of “Resident Individuals to freely remit up to USD 200,000 per calendar year for acquiring and hold immovable property, to invest in stocks, shares, exchange traded funds, debt instruments, stock options and index options outside India without prior approval of the Reserve Bank of India” foreign currency exchange is missing…Can you please elaborate on this?Β So you’re agreeing that forex trading in India is not legal right?

Company Executive-yeah!! We are into CFD’s. Not forex trading.

Basavaraj-again….is this CFD legal? Under whose regulation you do this trading? Hope this link will be an eye opener for you personally

Hindu Businessline article dated August 25th 2012

Company Executive -no it is legal. We are trading under the instructions of BAPPEBTI (ITS LIKE SEBI in India) . And we have our regulated by the Jakarta Futures Exchange.

Basavaraj-I need Indian regulator not Jakarta or any other unregulated country source.Β If any issue with your company, default from opposite party or some other technical issue then you mean to say that I need to approach Jakarta Future Exchange or BAPPEBTI?

Simply to say….you knocked the wrong door…sorry

Company Executive-Sir in India whatever traded you take, when you punch the order it goes to Bombay stock exchange and you need not to go to Bombay to trade. So same here we are directly member of Jakarta.

Basavaraj-Agree….I am asking if I need to sue your company or default to my trade then whom I need to approach? Jakarta regulator?

Company Executive-As of now such things have not happened. We are registered in India, we have physical offices in Bangalore, whatever queries you have can consult here only.

Basavaraj-You might have registered as a company but are you registered as a broker with SEBI? Also what guarantee you provide that nothing will happen in future if not happened in the past

Company Executive-We are nothing to do with the Indian market, we are in International market, so we need not to report to SEBI. In fact RBI and SEBI have to report to BAPPEBTI. So we are directly member of that. Tomorrow even if the Harvest is not there BAPPEBTI will give you 2 options like to continue the trading with other broker or you can withdraw the whole amount.

Basavaraj-Oh is it? I don’t know this that RBI and SEBI will come under BAPPEBTI? Can you provide the proof of this claim?

Company Executive-You will get two copies of documentation from Jakarta so everything will be in the documentation.

Basavaraj-I am not asking the documentation…. Please first clear my doubt about the regulator. You said RBI and SEBI will come under BAPPEBTI…..so provide me proof then I will be your first customer

Company Executive-RBI and SEBI related to India, but BAPPEBTI is Asian regulatory body. RBI has given permission that Resident Individuals to freely remit up to USD 200,000 per(now it is revised to75,000$) calendar year for acquiring and hold immovable property, to invest in stocks, shares, exchange traded funds, debt instruments, stock options and index options outside India. Anything above that we have to ask the permission from RBI.

Basavaraj-But in above lines where they included forex trading? Is BAPPEBTI is regulating the whole Asia? Are so can you provide the proof?

FINALLY…NO ANSWER FROM OPPOSITE SIDE πŸ™‚

Below are a few links which make sure that the forex trading in India not involving Indian Rupee is illegal.

RBI Letter Dated SeptemberΒ 17th 2013.

RBI Notification Dated November 17th 2011.

A complete list of FAQs Forex Facilities for Residents (Individuals) by RBI (last updated on September 30th 2013).

Hope above links will be providing us a clear indication that such trading using online platform is illegal. But I have doubt about the above-said company, from whose representative I got a call is from Bangalore and how they are so openly offering without fear of regulations. Get up regulators !!! Don’t act lately like what you did with Sahara, HarshadΒ Mehta, Stock Guru India or SaradhaΒ Chit Fund.

275 Comments

  1. Hi. As of today (11/Sep/2019), is fx trading with an FCA Regulated FX Broker still illegal for resident Indians? I was thinking about having the trading account in the name of my mom who is a residing in India. I live in the Middle East and the broker said that they cannot accept clients from the country I live in but can accept clients from India. If it is not legal in India, then this broker would not have accepted clients as per their AML / KYC process. Pls throw some light on this.

    Reply
    • Dear CD,
      Check whether the broker registered with SEBI or not.

      Reply
  2. I want to know if it is legal to trade crypotcurrency between India and outside India online exchange for arbitrage opportunity. In this case I just want to keep money in Indian exchange and keep on trade that with coin for arbitrage. My query is as below.
    1. Is it legal or allowed? I am ready to take risk.
    2. What will be tax implication in both country?
    3. Will it break the law under FEMA and money laundering?

    Reply
    • Brijesh-As of now it is neither legal nor illegal. If any time in future IT Dept ask you the source of money, then you must be ready to answer. Regarding taxation, it is capital gain tax for you.

      Reply
  3. hai,, i am from bangalore .. and i m trading with XM.COM broker…trading ,commodity ,forex and all,,is it safe/gud… or is there any prblm with this…??? kinldy suggest me ….

    Reply
    • Raj-Simple is to check whether they are registered with SEBI or not.

      Reply
  4. I think you have no idea about forex. Forex trading is legal. I am a trader. Now I am trading in forex. Don’t publish wrong words to the public if you have no idea.

    Reply
    • Priyaranjan-May I know which broker with whom you are doing trading. Let me know whether he is registered with SEBI or not. Then we discuss about who is right and wrong. What you say? πŸ™‚

      Reply
  5. i was unaware of indian laws with regard to forex trading and opened a forex trading account online. i have even transferred 400 dollars. Now i dont want to trade after i came to know of regulations. It was a trap of international companies and i got into it. I am innocent as it is wrongly done.

    Please guide

    Reply
      • Hariom Basavaraj T.,
        Even I am faceing same prob. as Neerja kumar, I am in with bforex, UK co. I also transferred 200 dollors, but not yet withdrawal profit, I come to know regarding regulations since eight days, hence i have stopped trading and requesting them for legal documents for further trade, but i a not getting proper answer, so can u help me in this matter, how to outcome from this, if it is legal also please tell how ?

        Regards,
        Devaraj

        Reply
          • Hariom Bro,
            What shall I do now, can I withdraw my amount from them, please guide me sir

            regards
            devaraj

            Reply
              • Hariom Bro,
                Shall I withdraw with profit made also, or amount deposited only, and if they ask some details for withdrawal, can I give them ?

                Devaraj

                Reply
                • Devraj-You can withdraw whole amount. Why they ask and why you have to give explanation?

                  Reply
  6. hello sir, few days ago a person came to me and give me a proposal to account holing or FD(Fixed Deposit). condition was :-
    If i provide 1Cr INR account to him by holding he will give me 3Cr INR in advance through RTGS .

    he will use holding account money in Forex trading.I dont know is this a genuine process or not?
    Could you please give some light in it.?
    Thank you

    Reply
    • Prashant-It is fake claims. Never ever rely on such claims. If he still insist you for investment, you can complain against him.

      Reply
      • Thank you ,
        I m intrested to know about Forex trading.. if u have me any suggestion or advice so please ,It would help me to learn Forex trading…
        Thank you..
        Prashant Sharma

        Reply
  7. I need to know can we do commodity trading with overseas broker as an Indian resident?

    Reply
      • i have seen very low lot size and low loss and also amount required is less which is in
        my capacity

        Reply
          • thanks for fast reply, I like to know what kind of risk ?

            Reply
              • Thanks for reply, my main concern is we can do or not, FEMA will be an issue or not in this case

                Reply
                • Animesh-Many laws can play the roles and skew you. Hence, I said in beginning, go with your own RISK. Rest left with you.

                  Reply
  8. is any idea about Binary Trading….. or it is legal or not
    best flatform US ,UK and other country allow these type of trading
    but lezy indian govt…nit pass any rule about binary trading….

    Reply
  9. good morning sir
    what is your opinion about the person who dont know all these thing about forex and he/she can entered in forex trading and doing forex trading right now ?

    Reply
  10. Dear All
    I want to inform you that 2 years ago I started trading in 4xp.com with 250 dollars (approx 13000)Rs,but after some days I lost everything as the company left India office.

    Reply
    • Chandan-Thanks for sharing your bad experience. Let others at least heed your experience.

      Reply
  11. Sir how trading start in forex our country not allow so pls authorised broker in India so iam start trading in forex reply me

    Reply
  12. Hello sir,
    My question is if some one is using skrill or paypal to indirectly transfering money back and forth for binary trading in trusted broker, How can the bank is suppose to know from where the money is comming.
    For example if I use skill to transfer money from my trades to my bank a/c ,the name of the company banks will found skrill . There is no possible way skrill will leak info that it was forex money and they ask us we simply can say it from the services i provided from freelancing ,blog, affiliating etc.

    Reply
    • Mayank-First check the TRUST of your trusted broker and then act.

      Reply
      • thanks for reply so fast sir
        lets say the broker is 100% trusted for some reasons and also i am not gonna put only small amount than is my theory correct or have some hole

        Reply
        • sorry for mistake i mean i will not put on money more than 10 $ not any big money

          Reply
        • Mayank-My simple answer to all such comments for this particular post is “DO AT YOUR OWN RISK, BECAUSE AT THE END IT IS YOUR MONEY BUT NOT MINE”.

          Reply
          • Sir Evan you can suggest us legal broker of forex trading.! We are not professional as you..!

            Reply
            • Jagdeep-For you information, I am not the professional BROKER πŸ™‚

              Reply
              • But sir you can help us for right broker because you have lots of skills you can compair brokers policeys help us Sir.! You are not broker but you already helping us for aweaness of forex scam..!

                Reply
                • Jagdeep-There are thousands of brokers. How can I? It is your comfort you can chose at the end.

                  Reply
  13. Can I trade with INR/USD pair in iforex.in, forex.com, mtraders.in etc? legally?

    Reply
  14. HI Basavaraj,

    Thanks for this. A question though: can I invest in MBS in US sitting here in India. How is this done? Is it legal and is it regulated. Is it present in our system (even illegally?).

    Thanks, A

    Reply
  15. Hi Basavaraj.

    This is regarding Forex trading in INDIA by a company name SIX Capital( Singapore Based). SIX Capital is providing training of Forex trading and after training they will select for trading as a trader. here 200+ students are attending their training and company is going to open their office in Mumbai very soon for Forex trading. But as you have already discussed earlier that Forex trading in INDIA NOT INCLUDING INR IS ILLEGAL and this is absolutely right as per RBI regulation. My question to you is that should I quit this training or question them regarding this issue.
    or is it possible that they can do it by outsourcing.

    Pls, suggest me about this, waiting for your response.

    Regards,
    Sumit

    Reply
    • Sumit-Please question the issues of what I said above. Let them show the SEBI registration. Otherwise, you inform them that you first write a letter to SEBI about their company. If SEBI have no issues, then you will go ahead. I think they run away πŸ™‚

      Reply
  16. Hi , I am presently staying 7 months overseas and 5 months in India for any financial year
    I have an NRI account and receive remittances for my salary from overseas
    Want to start FOREX trading
    The income I receive is non taxable and plan to invest in FOREX
    Can I start forex trading without any legal hassles.

    Reply
      • thank you

        Reply
  17. Is commodity trading ( (xau/usd) legal? the leverge is 1:100

    Reply
    • Purvi-First check whether the broker offering such platform is registered with SEBI or not. That too check with SEBI portal. If he is registered with SEBI, then legal.

      Reply
      • it is not but i have already made investment. what do i do now? lost 75% of my investment

        Reply
        • Purvi-You can’t do anything but a BIG LEGAL BATTLE. Get ready if you need that cash back. I hope you got my point about legality of such platforms.

          Reply
          • Can i convicted of any charges for investing? The company made me sign a couple of forms which made them free of any liability i suppose.

            Reply
            • Purvi-This is what they do. They take signature and we blindly sign on those papers. You will not be convicted, but if the amount of cash you lost is MORE to you, then I suggest you to take the legal step immediately.

              Reply
  18. Hello Sir,

    Please let me know if I will face any issue following below method,

    1. I will send money to my friend India account.
    2. Open forex account in my friend name and he will fund the account from his foreign account.
    3. Withdraw profit to his foreign account.
    4. Transfer money to my India account.

    Then pay income tax on this amount in India stating as other business income (like freelancing, consulting etc) or as GIFT.

    Reply
    • Sanjay-First try to find a friend who is ready to help you in this illegal act. If he can join you. Then my best of luck πŸ™‚

      Reply
      • Well according to me it is not illegal act!! it is just a way to do things, not anything illegal

        Reply
  19. Sir,

    Do you have any idea about the regulations for Binary options trading in India?

    Reply
      • Hi
        is there any legal platform for trading forex in India if not shall i quit forex because i am new to trading thinking to earn some decent money

        Reply
  20. hello sir firstofall thanks for the guidance..i am in commodity market i am getting my funds by broker directly to the bank.i think in the same format forex also works.my question is “is it possible if bank or IT asks me the source of money..if i said i gain from commodity market whether they will accept or not i want to know. because commodity is legal..

    Reply
  21. Hello sir,
    pls tell me Forex Trading fantastic Opportunity its legal or not ?

    Just received a message about a fantastic Opportunity for Investors in Forex Trading :
    1) Min 30 Lacs to. Max 50 lacs investment.
    2) Period of investment – 2 options : 20 days option and 40 days option.
    3) ROI : 60% on investment after 20 days ( eg : For 50 Lacs investor gets 80 lacs after 20 days. Profit of 30 lacs) . 4) Agreement will be signed.
    5) ROI will be transfered through RTGS to the same bank account from where the investment is made.

    by my mail id .
    thanks

    kalpana

    Reply
    • Kalpana-It is still illegal. If the person is so confident of 60% return then why he is running behind clients for investment? If that much is the return then in few months he may be WORLD’s RICHEST PERSON. Then why he is begging you to invest? Simply understand the basics of investment rules-1) Anything illegal is always dangerous and may leads to lost in your principal too. 2) Higher return always leads to higher risk. Think and decide.

      Reply
      • hello sir, but theres still a large number of people trading in the forex markets , and brokerages freely operating in the country how the hell are they getting away with it . after so long how come no action has been taken. on top of that dont think the banks are freezing any accounts as such also

        Reply
  22. Hello Sir,

    I am an NRI staying in Saudi Arabia, in this case, can i trade in international commodity & forex market.

    Kindly provide more details or website link, in my case.

    Thanking You,

    Reply
      • Sir.
        I know the meaning for RBI…please can you tell me the meaning for SEBI.

        Reply
  23. Dear Mr Basavaraj,

    I am a Mechanical Engineer with over 20 yrs of exp.
    I want to change my career and planning to persue
    a career in finance by doing CFP. How is the scope
    and job prospects for a CFP professional in India ?
    Please give me your frank opinion.

    Thanks in advance

    Reply
    • Shivashankar-Each profession comes with it’s own positive and negative things. At the same time, I am not downing you for not pursuing the CFP. Opportunities are best but CFP is just a door to learn personal finance. Also, considering the dynamic nature of knowledge, regulatory issues, you must opt the ways very sensibly.

      Reply
  24. Hi Sir,

    Will suggest me the legal sources of forex and share trading in india.

    Reply
  25. can it is a legal webtrader website.i have active a live account and deposit 100$ .now how i withdraw this mony.plzz help me.

    Reply
    • Brajagopal-If it is SEBI registered then it is legal. Check for the company registration with SEBI and also follow above rules.

      Reply
  26. @Basavaraj,

    What if the traders win contest prize money in forex broker and trade with those money ? Are such withdrawals accepted in India because there is no deposit from the traders end.

    Also one can consider to be signal providers through demo accounts and if they are successfully making money through their signal providing service. This has no rules to violate.

    Reply
    • Ashvini-It is still illegal (whether the money deposited from trader end or not). Virtual trading is different and there can be any type of underlying asset to trade and there is no such restriction.

      Reply
      • Thank you for the fast response. So, providing signal service through demo accounts should serve as analyst job. There are many account managers who manage foreign clients fund and any remittance to India is considered as income which is legal.

        Reply
  27. Hi,

    I am totally new to trading and don’t know basic terms .
    I made an account in IFOREX website and I told the representative of website on being called over phone that FOREX is illegal in india. He said that if you invest in Gold/ Platinum etc which involve transaction in INR , then its not illegal. He sent me following link to ascertain that upto $250000, its legal :

    http://www.moneycontrol.com/news/economy/indians-can-investto-36-250000-annually-overseas_1290711.html

    Pls guide me what should i do.

    Thanks

    Reply
    • Sachin-It is purely illegal and if they are making the trade with a combination of INR then let them show the SEBI registration. The link says investment not specify forex.

      Reply
  28. is it legal to open a demo account(dealing with virtual money) with an overseas forex trading website

    Reply
    • Jaskaran-If it is DEMO without any money transactions like virtual trading platforms then no issues.

      Reply
      • can a broker be registered with sebi and be working through an overseas forex trading website ? if so, will the transactions and trading in pairs involving indian rupee considered legal

        Reply
  29. Hey sir, my sister lives in USA if i deposit money in forex from USA and operate forex trading from india is it legal?

    Reply
    • Jignesh-How you make sure to come back that money in India? What reasons you say to IT Department or Banker? What will be the tax implications to your sister in USA? Whether you have answers to all these questions?

      Reply
  30. Sir What is the best alternative of Forex Trading in india with Legality and What is the minimum age for doing it.

    Reply
    • Aman-Any adult can start doing trading. You can trade in currency trading.

      Reply
  31. Hey Please tell me can i do Forex Trading via Nord Forex India Pvt. Ltd. ?

    Reply
    • RAvi-If it is within legal frame which I mentioned above then you can do it.

      Reply
      • Sir…he is saying i can do in INR which is legal i think so…they are using NOW platform for trading in INR…i have to give them a check for opening my account & last six months bank statement…so can i go for this…Please suggest…& also tell me when it will become illegal

        Reply
        • Ravi-Please check whether they are the registered broker with SEBI.

          Reply
  32. Dear Basawaraj,

    A Private trader in India is asking for some money for doing some forex stuff. I am not at all in finances and dont know any thing about finance. But he is offering 10% every month on the investment. He is known to my relatives. Is it so much profitable that he can give me 10% every month. He does not have any office, he is doing trading from his house. Kindly guide.

    Reply
    • RSA-My simple advice is STAY AWAY. More return means more risk. If he is so confident of offering you monthly 10% then why he is begging the money??

      Reply
  33. Hi Everyone,

    One thing that I would like to tell you about forex trading legal or not ?

    > RBI have absolute powers to decide and regulate any financial activity in india

    > As they (RBI) have not mentioned exactly anything about legal status of FOREX trading .

    > So people are coming up with their own theory of ” legal” or “not legal” .

    > Due to absence of any exact status of legality from RBI some people are not doing it and others are doing it without any issue .

    Reply
    • Vinay-Please refer the links I provided then decide whether RBI is particular about this issue or not.

      Reply
  34. Hi
    I got a call from svsfx. They claimed to have a subsidiary company in india which manages their financials which is as per rbi and sebi norms. Intially I thought this is legal ( I am a bit dumb!!)…opened an account with them. Later on I understood that what they were doing is actually hawala transactions. They have an account in india and we deposit money in inr which is converted into dollars and the process is same when we have to make a withdrawal.
    Anyways
    1.The problem is I opened an account with svsfx.
    How should I get out of it
    What will be the consequences if I dont operate the account or if I withdraw the money I deposited and leave the rest?

    Rbi circular says forex is allowed but leveraging is illegal. How far is this true

    Reply
    • Arjun-Contact the same officials to close it. I don’t know much about it. Also, hope other readers of this post understand now about my opinion that how these companies running their business illegally.

      Reply
  35. deat sir plz tell me that forex trading is legal or not and why beacause ufx exwcutive says no problem when u withdrawl 10 lac below amount and no rbi enquiry for it above 10 lac transaction rbi prohibited so i want to 100 dollars investment no upper so can i do it or not and if i do so then which type of punishment have to get me plz reply me because a lot of no. people are trading in forex who live in india .

    Reply
    • Plz sir tell me many people are trading in forex who lives in India and still no legal action taken by our government why? And tell me can I trade in future currency and bank also involved in foreign transaction and no action taken by them . in lower amount can I trade in forex or not and do then what will happened.

      Reply
      • Kamal-Whether Govt acted or not is left to it. But here I am putting the legality. Rest is left with you to decide.

        Reply
  36. hello,

    its really knowledgeably blog…apart from forex there is a lot of information regarding investment planing but may I KNOW why forex trading is illegal in india…i try to find out why it illegal…although there are more immersing country like india give permission to trad in forex market….forex broker i think not cheater they are regulated by some designed authority like FCS,MIFID,CYSEC,….and a lot..they have thier proper platform and advance platform for trading…their deposit and withdrawal process also very esay…now the question come…how do i know about it…i was at dubai few year back…i revived a call from one of forex broker representative he teach me some thing about it..few week i did research on it…first i invested 5 k usd that i lost with in 1 month…again i deposit 5 k usd and 4 month i trad with them…after 4 month i withdraw 46 k usd…
    broker was also upset with me but i made money with my knowledge…
    so find out some way to do it..dont go against regulation..but there would be way…as big corrupt ministers and……doing.

    Reply
    • Arun-If big corrupt ministers breaking law means we too? Is the Forex trading only way to earn money? There are enough opportunities for traders in India itself then why this ONLY?

      Reply
  37. Is hyip is legal in india

    Reply
      • High yield investment program(hyip) similar paid to click(ptc)

        Reply
  38. is it legal to mining bitcoin from india? Another question is, if i transfer dollar from perfect money to paypal and then to my bank account,is there any problem of indian regulation?

    Reply
    • Basant-I am not aware that much about Bitcoin legality. Obviously it will be problem if it is illegal money, first your bank itself will ask the source of money.

      Reply
      • sir ,will bank ask the source of money if the transaction amount is very small amount about 20000 per month?
        please sir give some solution.

        Reply
          • what will happend if i tell them from bitcoin mining? And please suggest what would be safe to tell about source?

            Reply
            • Basant-Then they want to know whether the source you said so is proper or not. Sorry, I am not here to break the law and help you. Instead, I suggest you opt the legal way. Now it is left with you.

              Reply
            • i just want to know about Liberalised Remittances Scheme? please explain it.

              Reply
              • what would be the maximum punishment for this activity as like unable to say the source of income or illegal source of income?

                Reply
  39. Hi Basavaraj Tonagatti ,

    Your article gives a clear insight about Fx. Do you have any suggestion or insight about about Kumar sayings on March 1, 2015 at 12:20 PM

    Reply
    • Ram-1) Why I have to go to foreign for the sake of Forex Trading? 2) Company formation for an individual for the same of Forex Trading? Seems to be bit over exicited to do at whatever cost πŸ™‚ 3) He seems to be trader or someone from broking firm, who claiming that only FOREX trading is a BEST profession. But negating the risks involved. This is how the commmon man be in trap and loose money. Trading is too risky. 4) Whether trading in Forex is only way for common man uplift? Too strange. 5) Why only small backward countried allowed such trading and why not developed countries? Also, is it necessary to follow other countries blindly? 6) He seems to be more of a activist than a knowledgeable trader. Let him get more expeirence and maturity about TRADING πŸ™‚

      Hope you got my answers for his lengthy comment πŸ™‚

      Reply
      • I am a forex trader and I love trading in forex. I also have traded in Nifty and I have watched USDINR or other currency pairs in Indian exchanges. I want to tell you..if you want to make good money..go to forex…yes it is b best option so far. Best volatility and best volumes. If you do not know technical analysis then trading is gambling for anyone in any market. If you know how to trade then you can make money anywhere but if you want make lot of money then only place is forex. AND MOST IMPORTANT EVERYONE KNOWS WHO MOVES INDIAN MARKET . IT IS BETTER TO TRADE IN FOREX WHERE NO ONE CAN MOVE MARKET IN THEIR FAVOUR.

        Reply
        • Suhas-Best of luck πŸ™‚ May I know the exact meaning of IF YOU KNOW HOW TO TRADE and LOT OF MONEY THEN ONLY PLACE IS FOREX.

          Reply
          • You think you re an expert in english ?Oxford university certified?.Try to answer the questions rather than asking silly questions.

            Reply
            • Sarath-I am not proclaimed myself as an EXPERT πŸ™‚ Please check your facts and let me know where I mentioned myself as an expert. Silly questions? Let the readers of the post decide. I don’t know why it is hurting you so much if I input legality of Indian law πŸ™‚

              Reply
      • I have answers for all your questions
        1) Forex markets are extremely volatile and have a lot of money making oppurtunites.The amount traded in EUR/USD alone is equal to 10 times the amount traded in all stock exchanges in the world together in a day and 1,00,000 times the amount traded in nifty.
        2) Trading is not too risky if you have proper money management and pre determined rules.This is what you know as an expert?A simple assertion that “TRADING IS TOO RISKY”.Risk is everywhere.You work for hours in office.You risk obesity and diabetes sitting in the same place.
        3)Many countries in the world including DEVELOPED countries allow forex trading.Of course,FOrex trading is where money exchanges hands and there is a good chance you can make money from a small investment.
        4) Indian market is riskier than forex market, here promoters control equities and rob poor people off their money.RBI ,with all its money put together cannot manipulate the EUR/USD pair by even 0.01%.The market cap of Indian equities is simply too small to eradicate such manipulations.
        5)Oh!! You can measure a person’s trading skill by a few comments?Lol.

        Hope you got my answers for your lengthy comment πŸ™‚

        Reply
        • Sarath-Volatility is Good or bad? Trading is too risky a simple assertion is same as MONEY MANAGEMENT and PRE DETERMINED RULES πŸ™‚ May I know those DEVELOPED countries please…Do you know who the manipulator of Indian market? It is not the promoter. Please check your facts of how much % the promoters hold and how often the buy and sell. Hope you correct your facts before stating that FOREX is the only money making strategy of this world πŸ™‚

          Reply
          • You Know why Rasoya protiens trading at 20 fell to 0.8?
            You know why Allied Digital Services trading at 250 fell to 20?
            You Know why India Bulls Wholesale services fell from 30 to 10?
            You know why gitanjali jems fell from 600 to 40?
            You know why C Mahendra Exports fell form 150 to 6?
            You know why Subex fell from 600 to 6 ?

            Promoters are manipulators in all these cases.Promoters create bullish sentiment for poor retailers to buy.When everybodys in, the promoters dump the stocks creating panic among retailers again.Thats ho they steal the money.Retail traders who dont have enough money to manipulate anything are the losers finally.This is how stock market works.Now tell me.Forex trading is banned only in Belarus
            Bosnia & Herzegovina, British Columbia (Canada) ,Bulgaria ,Burma ,China (Strict regulations if not total ban),Cuba ,India ,Indonesia ,IvoryCoast ,Iran ,Liberia ,Lithuania , Macedonia, Malaysia, Montenegro ,Myanmar, Nigeria ,North Korea ,Pakistan ,Quebec (Canada) ,Romania ,South Korea ,Sri Lanka (Recently relaxed but not confirmed) ,St.Helena, Sudan, Syria ,Ukraine Zimbabwe .Rest all the developed countries allow forex trading -France ,Germany, Italy,Spain, England….
            I know all about crap indian equities and why L&T finance always lingers in the range 65-75.Please try to accept.Risk is everywhere.You as a financial expert should know about these more than me about all these manipulations. Nobody Cares about rupee at all.Even Indians dont buy rupee against the USD then How do you expect some Foreign Investor to buy our countrys’ stocks and currency.Thats the pitiful situation of our country , equities and ever deteriorating rupee..

            Reply
            • Sarath-It the lack of knowledge that makes you to invest in such companies which you named. When I am INVESTING then the current L&T range of 65-75 not matters to me. Also, do you feel there is no manipulation in forex trading??

              Reply
              • Those companies were really good before promoters started robbing investors money.Its not the lack of knowledge.Well,Can you name a few companies with your great knowledge that will give me returns 5 years from now?I am ready to invest.Moreover if I make losses from the names you suggest,will you compensate me for the losses incurred because of your advice.You said I lack Knowledge.Well ,no one can suggest anything.Because RISK is everywhere.Lol,if you invest ,it doesnt matter how the stock moves.What a joke!!!!Imagine a person who invested 65 lakhs in L&t.He will lose a lot even if stock moves by a small fraction.Whats the guarantee that stock will always move up after you invest?What if it doesn’t even after 20 years.?Will you keep the money INVESTED adamantly till you reach 70?

                And coming to your final question.Manipulation in forex.I already told you its not easy to manipulate forex as it is to manipulate a stock.Simply because huge amount flows in and out.Since it involves huge amount of risk to manipulate forex,even banks are not brave enough to take the risk of manipulating forex,as they appoint qualified traders to trade on their behalf who trade with strict rules.Not like as you said,invest and forget.You are wrong.The current range should matter to you even if you invest.May be as a certified financial planner ,you only throw pieces of advice to your clients to INVEST AND FORGET ABOUT CURRENT RANGE.IT DOESNT MATTER AS YOU’RE INVESTING.After a few years your clients will be after you.Caution!!!

                Reply
                • Sarath-Equity investment meant for 5 years? This where you and me getting different views πŸ™‚ Check your facts about equity INVESTMENT. Volatility is inherent. But it subdue when we invest for long term. When you invest in cheap stocks or the stocks which recommended by the so-called experts (who in turn brokers) then there is high possibility that they turn to negative. Look at people who look for value investment. For example Basant Maheshwari and Manekar (a person recently in news due to UB). Invest and Forget is not meant for any investment.

                  The difference between you and me is, you are negating the views of stock market TRADING, but I am putting the views of stock market INVESTING. Hope you understand the difference πŸ™‚

                  Reply
            • Hi! Mr.Sarath i like very much your opinions and comments , i agree your comments regarding this issue..
              i am alos professional Forex trader like you sine 2010, plz send me your contact to my mail ,we can share our views which may help a lot both of us.
              thanks in advance.

              Reply
  40. Bro, i have read allot about this Forex illegality in INDIA, and fed up reading.
    I am also a trader earning a good amount. Not only me but there are so many traders earning through forex and withdrawing in lacs per month in INDIA, still no problem.
    -So i am planning to go to foriegn country and open a bank account there and withdraw all my PROFITS in that bank account, and there are some banks in foriegn countries which provides instant bank account opening to Foriegners within 1-2 days. Then tell if i do like this and come back to india , and use that money here is it still illegal. i dont think so it will be illegal.
    -And as per RBI it is stated that, We can transact $75,000 per year, and we dont have to give any reason for such transaction to RBI or Bank. If it is done in a safe way.
    – Read carefully and reply back what you say about this.?

    Reply
      • Thanks bro, I am just happy that i’ll be doing trading legally in some months. πŸ™‚ Being a Forex trader is a Proud moment for me.

        Reply
        • Exorcist-Is the tag “FOREX TRADER” or “MAKING MONEY” makes you proud??

          Reply
          • I am Proud of Being a “Successful Forex Trader”. And I am also Proud that i will be living a “ROYAL LIFE”. “TRADING IT’S A LIFESTYLE NOT A JOB”. πŸ˜‰

            Reply
  41. I want to tread in forex.what ways to tread in fx??

    Many readers of yr blog they say by opening nri account. And etc…
    Tell me ways i am confused.
    Pls reply on my email.

    Reply
  42. an I do forex trading for research/ education purpose? and how?

    Reply
    • Ashish-Trading is trading, whether you do it for business, learning or whatever reason.

      Reply
    • for educational purpose u dnt need any ones permisiion or real money open a demo account and trade as much as u want

      Reply
  43. Friends,

    I am also a forex trader, a signal provider and pool account manager in forex business from last 4 years and able to develop a very big and good forex earning business model where a comman man easily can earn from 10,000-50,000 INR sitting at home and can improve the life of a comman man or weaker section . After reading all the points above i would like to mention few points here please and need support –

    1. Forex trading from India is illegal and there is no doubt about it but we want to do it legally from India and its legal way is you can be NRI and use the own account into that particular country where forex trading is legally allowed and can remit your profits into NRE account and can show the concern authority about your earnings and pay taxex accordingly and it is legal because you have used your stored capital for the forex trading there not by remitting funds from India.

    2. You can form a company out side India ( where forex trading is legally allowed ) as a subsidiary of your Indian company ( Indian company will be parent company but this for those who have already own any company in India ) and remit funds outside to subsidiary company and subsidiary will do forex trading and will revert you the benefits as a dividend and it is legal.

    3. As this is the world’s largest business ( more than 5 Trillion USD per day ) so no doubt if someone has its knowledge and proper risk management then life can be changed in short span of time and i do not feel personally that there is such a good earning opportunity on earth except Forex trading and for indian people where unemployment and poverty too high then why Indian Government is not allowing to do for a comman man ( whereas all political party and leaders talk about comman man so i think they should be serious on this business opportunity and make the laws accordingly ).

    4. Its my view that most of the Indian Political Parties and Leaders ( except few leaders but may be they do not know about forex trading potential so could not be focused on this ) talk about the welfare of the people but never think seriously to do for them because if comman man will be financially strong then never will accept their dirty politics so they think that comman man should be always poor and struggler with there problems.

    5. If this business have not good potential and liking with mass then why millions of millions of people attracting towards it. Very small small countries like Mauritius.Singapore.Hongkong, UAE ,Indonesia, Japan and many more have allowed forex trading legally in own country then why not India. I think it is the totally matter of intentions and nothing else. Is there not involved risk for the comman man there ?

    6. I am not a follower of any party but i know the power of aam aadmi ( comman man ) its result we have seen in Delhi election so my view is that we should all forex trading lovers should organise and make a common sign letter and give to Shri Narendra Modi sir who is our hourable Prime Minister as he thinks always about comman man and think for the bottom people and when we all shall be together present our interest and concern then we hope that sure he will re think and talk to the concern authorities to do it legally from India. As he has also own drive for online ( Digital India ) concept and Skill Development program. I think Forex Trading skill should be covered into his skill development program. We are also interested to do it legally from India and i am more confident that India has the best tallent in world and best growing your population so we can bring huge capital to our financial institutions through forex trading and can change jointly many comman man life. I am also a trader and can generate up to 30% per month profits easily from forex trading.

    7. Already millions of people doing this business by wrong way which is also a huge loss for the government and my view is that indian government can get good revenues through this business if legally allowed.

    8.So i think for this program please email me and decide jointly how we can be collective for this concern and can be reach our message to the government. I think huge unemployment can be remove by this business . I need your valuable feed back or suggetion please. All the best.

    With regards
    P.Kumar

    Reply
    • I agree with your views and ready to support your campaign. Let us make a concrete plan and put before Mr Narendra Modi. If lakhs of Indians support definitely we will win

      Reply
    • Mr. P.Kumar sir plz contact with me i want to talk with u via phone i m also Forex Trader .
      i have read ur thoughts i m fully agree with u.
      Hope u contact me.

      Reply
    • Mr. P.Kumar, even i would support for your campaign. I have always thought of this but no support.
      How do we move this forward to the government, please let us know of this

      Reply
  44. Sir,
    If I do options trading with ICICI bank, will the bank ask for clarification? ICICI seems to be liberal. Do they oppose forex trading and binary trading? Thank You

    Reply
    • Ashish-Option trading they allow. But forex trading where Rupee not involved is hard for you to get it from ICICI. They may be liberal, but not to that extent that to close the business shortly πŸ™‚

      Reply
      • Is the above mentioned option refers to the Binary options ?

        Reply
        • Yes. Its binary options Ommi

          Reply
  45. Sir is exness is fraud company or not

    Reply
  46. Is there any amendment made on FMEA ..? Is the forex trading still Illegal in India? Recently i am seeing lot of advertisements and people involvements in this trading..

    Also resident Indian can hold foreign stocks?

    Reply
    • Sokkan-As of now there is no such amendment and the above post still holds valid.

      Reply
      • What about holding a foreign stock? Consider stock of Accenture which is registered with NYSE….Is a resident Indian allowed hold that stocks?

        Reply
        • Sokkan-Stocks will come under investment but not trading and hence allowed.

          Reply
      • Have you read through the following notifications….is this anywhere related to this topic?

        Foreign Exchange Management (Deposit) Regulations, 2000 – Exemption thereof, RBI/2014-15/360 A.P. (DIR Series) Circular No.51, 17-12-2014

        Overseas Direct Investments by Indian Party – Rationalization / Liberalization, RBI/2014-15/371 A.P. (DIR Series) Circular No.54, 29-12-2014

        Reply
  47. I want to ask that is Binary trading legal in India or not ?
    If you are not aware of above question can you suggest me anyone legal person who can answer the question ?
    Thankyou.

    Reply
    • Ommi-I think Binary trading is a strategy of trading than a platform. If my understanding is correct then you can do so in India.

      Reply
      • Sir, I want to know basic difference between forex and binary trading.
        Suppose, if I earn any money using binary then am i suppose to pay any tax? Etc.
        Thanks for helping.

        Reply
        • Sir plz reply, waiting for your precious answer….

          Reply
  48. Hello Mr. Basavaraj,
    Do you know about binaryoptions? Is it also illegal in India?

    Reply
  49. Trading in international commodity market is legal or not. can i choose hic platform for commodity trading or it is also illegal

    Reply
      • Yes but in above article it is mentioned for currency trading only. i am asking for commodity.

        Reply
        • Kiran-Check with your broker before going ahead. I don’t feel it is necessary as currently in India commodity trade is very much active.

          Reply
  50. sir plz tell me that http://www.xforex.com is safe site for forex trading and if i deal with my icici ac than it is permissable ????plz reply as asap.

    Reply
    • Varun-I am not sure about the firm you mentioned. So trade at your own risk. But yes if you do with ICICI then no problem.

      Reply
  51. respected sir,
    nordfx.in is Certified by SEBI can i trade with this broker?

    Reply
    • Hari-They are registered and you can trade with INR to Dollar like that. So you can do that. But I can’t guarantee about broker and trading facilities they provide or the profit or loss you bear by going with them. Do at your own risk.

      Reply
  52. hello sir i request some details
    I live in india my BROTHER PR in singapore . can i trade FX using His bank a/c .
    if i get money from his bank to my indian bank account is illegal?
    plz give me advice

    Reply
    • Mani-You can trade in your brother’s account. But what income source your brother shows when they ask for source of income?

      Reply
  53. Hello,
    If I intend to provide my skills on forex trading to NRI’s under PAMM account. And earn commissions or service charges from those accounts, will it be treated as legal?
    Can I do that? Can it be shown in my tax return?
    Awaiting for your reply soon.
    Thanking you

    Reply
  54. hello sir,
    after reading your blog i came to know forex trading is not leagal.
    i wanted to know if suppose we wanted to withdraw our amount(big amounts) from the trading a/c to our bank a/c
    then is it also not legal(after paying the taxes),as up now the dollar is getting converted to rupees..!!
    thankx.

    Reply
    • Yuvraj-But what you will answer to Bank officials or tax department about the source of transfer?

      Reply
      • respected sir,
        so is there any possible way to get the withdrawals. and is it possible to get it in small denominations. like 20k per month so that my total income remains less then 2.5 lakh.
        and one more thing if i go abroad for further studies and then withdraw it in my NRO a/c, is it possible.

        thankx.

        Reply
        • Yuvraj-I am not aware of the ways which are illegal. So not aware of such things.

          Reply
          • sir,
            ohk. no problem. i’ll find the way out.
            sorry!!

            thankx.

            Reply
  55. Dear Basavaraj Sir

    Could you please share how could we trade in Indian Forex if we want to replicate the same movement / trade from International Pair like EUR/USD or USD/JPY.

    Am highly grateful to you for Creating this Post.

    Best Wishes..!!

    Ankit

    Reply
    • Ankit-As I said above, you can only trade with rupee as one currency against rest of currencies.

      Reply
  56. hello sir, recently i opened an account in http://www.bigoption.com/ i can trust this because they asking for documents to submit. so in future we may not face problems from money laundering issue

    Reply
    • Vikram-What documents are they asking? Also how you arrived to conclusion that there will not be any issue if they are asking for documents?? It is completely an eyewash.

      Reply
  57. Hi, I have a question can we advice forex scrip (e.g USD/EUR or NZD/USD) in public domain at what price to buy and sell as I am in India. Will it be legal

    Reply
    • Sharma-You can give advice if you follow the rules and regulation stipulated for an EXPERT. I am not aware of the regulatory framework of currency expert advisory.

      Reply
  58. Sir,

    TradersWay is legal or not legal.

    I have invested @ Rs 6000 ($100 Dolar). Pl advice

    Reply
    • Yajuvendra-Check it’s legality if for currency trading then it must be with rupee otherwise it is not legal. I will not comment on any organization or company. It is up to them to take risk and it is your wish to put your money.

      Reply
  59. HI,
    I have read one article which contains “100% LEGAL WAY TO TRADE FOREX FROM INDIA”

    As of content of the article – A person has to open an International Bank Account in his name and then transfer funds from India to his International Bank Account by using LRS Scheme of RBI, and when your funds trnasferred from India to International, the legality of India is closed. And then open a Trading Account which operated under a regulations by the Same Country. Then all the legalities shall apply in their country and it should be treated as LEGAL.

    My Question is : “IS IT LEGAL FORM TO TRADE FOREX” by using the said manner ?

    Please reply with your best answer.

    Awaiting your reply very very soon.

    Reply
    • VNS-This may be way of avoiding the legality. But how you bring back the earned income to India bank? The answer to your question is explained by themself only stating that it illegal πŸ™‚

      Reply
    • no Forex trading is iligal in India. My one friend is working that like field.

      Reply
  60. hello sir,
    is CFD allowed in India?

    Reply
  61. how to open account &broking office

    Reply
  62. According to law Funding from India in forex trading is illegal. So what? Nothing is impossible. There are many other ways to fund that can be hide from RBI. Like paypal and money bookers. so dont worrry guys. Funding through money bookers is safe and RBI cant see what you doing from this account. So, Invest it, Trade it and Live it…..

    Reply
  63. Dear Basavaraj , it is great to share such things. Enlighten me if I may do forex trading with Indian Infoline IIFL, is it legal

    Reply
  64. Dear Mr. Tonagatti,
    Nice article. Good insight about Forex trading in India and government regulations.
    One thing which I did not like here is the negative views about Forex trading. As you may be aware of the fact that several people are trading Forex successfully using some consistent strategy/method. The problem with Indian laws and lawmakers particularly in last couple of decades – they lack balanced thinking while making any laws. They lack vision and mostly their thinking is one-sided while framing any law. Laws are meant to cover almost all situations and almost all people and benefits almost all those come under law. Also, they are supposed to provide checks and balances to make it harder to violate such laws. Of course there will be exceptions and few corner cases but in this Forex laws they are totally ignorant about the people who can successfully trade Forex and change their lives for better. Person from poor background can become financially well-off with Forex trading if he has right skills. I am not suggesting that Forex trading is easy and everybody can trade successfully. But, there are certainly some people those who can Trade successfully. And these so called laws are not fair to these people.

    Reply
    • Ash-I am also not against Forex Trading but against crossing legality of land. You may say many things but still there are risks involved and common Indian investors who are more of FD savvy can’t understand these products. But let us hope for future Govt regulations and law changes for few intelligent investors πŸ™‚

      Reply
  65. I’m from India, and I’m forex traders, and I can say that it is the best thing that has ever happened to me.
    Forex trading is not legal in India, however it is one of the most risky business, but I can say that Forex has changed my life!
    And I would never ever quit forex trading, so I have decided to go abroad to establish my trading Skills.
    I already have offer from Canada, Australis, UK and Poland. So I have decided to go to Poland!

    I also think that people should get into this business to change their life. πŸ™‚

    Reply
    • Shivam-Wow….Best of luck πŸ™‚ I am the Indian citizen and I do trade in legal way πŸ™‚

      Reply
    • Hi Shivam,
      you are a lucky one…
      could you tell me exactly how can i start in forex?
      I am also intending to migrate USA as I am a Graphic Designer but I am also very interested in Forex too,
      what suggestions you have for me to get successful in future in forex in another country?

      Reply
    • heloo shivam..i loved your post…i have started forex trading…i m taking coaching about technical and fundamental analysis from delhi..i love forex business..but recently i came to know that it is illegal in india.but i have decided to make forex as my future business.i am serious about forex..but please help me..i want to trade in eur/usd not in eur/inr….please help me..what should i do

      Reply
  66. hey,

    it is really informative blog. thanks for that. See i am looking for investment where i could get easy returns. recently i came across same kind of company “iforex”. they have website “www.iforex.in” please i need your guidance if i want to invest in forex currency trading then which company i should refer too. thanks for anticipation.

    Reply
    • Amit-Do remember that there is nothing called “Easy Money”. If it is so then think that it is illegal or risk involves is more. First understand your risk appetite then start investing. I am against any such sites which offer these services. Rest is left at you.

      Reply
    • Dear Amit, threre are lot of ways to trade forex from india. Im providing forex signals which means when to buy & sell forex currencies. So that you can make atleast 20-30 % every month with a proper Risk and Money management. Pls contact me on [email protected].

      Reply
      • Vendan-What if the result is negative 20-30%? What guarantee you provide? Are you certified?

        Reply
  67. Hi sir(Basavaraj), i am not invested my own money in forex, I am teaching forex trading in online, and few of my students outside India invest some good money in their forex a/c, and i will trade on that a/c for training them with their own real forex a/c’s (forex a/c’s with my student’s name). I will recieve the payment from my students for my trading performance on their real a/c’s. I just act as a working partner and my student act as an investor.
    I will recieve my trading payment of the students a/c through e-currencies like perfect money, neteller, skrill, etc..
    i want to know that ” i am trading only in foreigner a/c’s (students outside india) and getting profits from their trading a/c’s through ecurrencies, so my activities are legal or illegal to RBI ?”

    If I want to pay Income tax, how i can pay for my income from my student’s a/c(foreigner a/c’s)

    thanks !

    Reply
    • Arun-In your case I am not aware whether your status is NRI or not. Second thing is, you are acting on behalf of your students and using their account details to do trade. Also you get your share from your students account to your account. Then legally how you can be liable for any trading done on behalf of your student. But at the same time doing such set of transactions, do you think you are doing right thing on behalf of student who may face some legal issue if their money is transacting from Indian original bank account? You are claiming to be teacher but before giving suggestion better to understand what will be percussion of your student and whether they are doing such acts within the law of land or not. So think yourself and act.

      Reply
  68. Hi,

    I am trading in forex for 4 years, and till today, there is no problem I faced, I made withdrawal and successfully get money.

    I start with free money (Contest).

    Last week I made another withdrawal. This time I used another bank account. Today I got call from this bank and they asked about money they received in my name. I told them that this is from forex trading. They said forex trading is not legal in India. Shock time for me, I made another withdrawal in last month and got money without any problem,

    What I need to do to complete this transaction. (355 EUR)

    Reply
    • Pawan-Good to know πŸ™‚ God bless in your risk taking ability in terms of return and legality.

      Reply
    • Just say that you are orking as an affliate for the forex company

      Reply
      • Sarath-When I said it is illegal to do Forex Trading in India (based on facts) then how I be affiliate to Forex Company (which is purely set up on breaking the rule of land)?

        Reply
  69. Hi ,

    I saw all u r commends and what I noticed that apart from this legal issue ….. Here is small story of my trading history with forex currently I am trading in international market from past 4 years prior to this I was ex employ of Indian commodity company heading regional branches in Karnataka for almost 8 years and m also a financial planner for my respected clients now here is comparison between indian commodities and international commodity
    Step 1 : not hedging is allowed in indian market with but hedging is allowed in Cfx there u avoid lose
    Step 2 : fundamental and technical analysation is very easy in international market but here in indian market is possible ?
    Step 3 : margin utilisation is very low in Cfx 1:400 leverage and profit spreads also is same but in indian market let me u can’t ?
    Step 3 : afcourse I agree that non of indian regulatory are involved in forex but FSA is involved its international govt boby to safe guard the investor money because I trade with ECN brokers they are not a market maker
    Step 4: if u r forex or CFx platform is registered under FSA and listed under ECN brokers then there is no issue with u r investment there are lot value added advantages in international market if u r a smart trader u r going to make money with out fail indian people are fails to make money even thow with smart because market tuning it’s very harder to cone with profit in commodity

    Reply
    • Madhu-Thanks for sharing your views. But do you think that such complicated product (when we look at normal Indian investor) will understand product easily and do his own technical and risk appetite things? Also barring such trading in India is due to some money laundering issues. When you say easy to analyse the international market, may I know in what context you are saying this? Regarding regulatory framework, do you feel for retail investor it is very much easy to interact with international regulator to deal? Also Indian market or investor not to that extent that they can think of international market, because of low penetration to equity market itself. Apart from these for investor there are lot of other options to understand and trade. Why to take such complication and risk your money??

      Reply
    • Madhu sir, i’m a Forex trader too but newbie thank you.I have bit confusion in financial matters,i need you guidance on how to withdraw and all.I’m really hving so much hope on this business,Please give your mail id or skype id so that i can contact you personally.Thank you.

      Reply
  70. I am an indian citizen living in australia on work permit Visa. I have been living abroad from last 2 years and might live for another 2 years. Forex Trading is legal in this country. So If I do forex trading in Australia, will it be legal?
    I am not paying any taxes in india and not making any remittances from India to Australia account.

    Reply
    • Jay-If no remittance from India or to India then no question of asking. But you have to act according to Australian law.

      Reply
      • I might make remittances to India Ultimately when I get any profit. Will it be considered illegal?

        Reply
        • Jay-Once you get profit then it get transferred to your Australian Bank Account and from Australian Bank Account to Indian Bank means no issue. But your Indian Bank Account is attached for trading then there will be issues.

          Reply
          • Thanks Basavraj, Information you have provided has been very useful.

            Reply
              • Sir (Basavaraj),

                Thanks for sharing excellent information. I have some questions. Could you please clarify:

                Question 1: My situation is also same as “Jay” situation. Having an Australian bank account and have work permit visa. Only problem is after working in Australia I came back to india and I am residing in india now. Now can I do forex trading online from india using my Australian bank account only but not any indian bank accounts.

                Question 2: Also if I get any profit in forex trading can I transfer the amount from my Australian bank account to NRE account. Do I need to explain the source of income to RBI. Could you please let me know.

                Thanks for your time.

                Reply
                • Rohit-You can do so. But how you bring that money to India? You need to explain the source of such amount if tax authorities asked for the same. Because you are staying here and definitely Indian bank officials raise the issue. Then what you say them?

                  Reply
                  • Thank you Sir. Sorry for the delayed response. I have one more question.

                    I have stayed more than 6 months outside india. In that case I think I attain NRI status. I would like to know
                    if there is any provision that NRIs can do forex trading while residing in india temporarily. Could you please
                    clarify.

                    Reply
                    • Rohit-The status of NRI will not come into picture. Because if you are using money transfer facility of Indian origin like your savings, current or NRE accounts then definitely it will be an issue.

                  • Dear Mr Basavaraj,

                    I have a similar question which I’d be very grateful if you can answer!

                    I worked for several years in Australia, later became a citizen there and am also an OCI (dual citizenship in India). Now I’m working in India for the past few years, so I’m a resident of India.

                    I still have some savings left in my Australian bank account – can I use that for forex trading in an account opened there itself?

                    In such case:
                    –> I will use only the existing savings held in Australia and not remit any forex from India.
                    –> I will take care to correctly report/pay applicable taxes in Australia and India.
                    –> I would be receiving the profit withdrawals in my Australian bank account, which I would remit to my SB (Resident) account in India as and when required.
                    –> the trading account is provided by a reputed company having offices in UK, Australia and a few other countries and registered with the appropriate authority/body.

                    In this scenario would it be legal to trade forex? Please advise soonest possible!

                    Many thanks in advance!

                    Shrikanth

                    Reply
                    • Shrikanth-But what source you mention when you remit the cash from Australia to India??

                    • I will mention as ‘own funds’ – as it would be out of income earned in AUS (on which I would have paid the tax there).

                      (I have transferred this way several times without any trouble.)

                    • Shrikanth-Currently you are staying in India then how this “OWN FUNDS”? I don’t know what is prompting you to take such risk, when rest of the investments are easily available legally for you.

                    • The legality is what I’m checking with you. Since (a) I’m not using forex remitted out of India and (b) it is openly declared, tax-paid income and (c) I’m a foreign national / dual citizen – does it not fall outside the scope of the FEMA/RBI rules? Can you please explain in detail.

                      I know there are other options for investments in India but as I have acquired substantial skill & knowledge of forex trading I want to include that in my portfolio if feasible.

                      I also want to want to check – in case forex trading & and CFDs are not allowable (because they are margin products), how about forex Options (e.g. those offered by Saxo Bank) and Binary Options?

                      Thanks!

                    • Shrikanth-There is no illegality if you do trading using the Australian Bank. But my question is how you justify the source of amount when you remit the cash to Indian? To be frank, I am not a big fan of trading. But a huge fan of equity investment.

                    • Hi, thanks for confirming there’s no illegality when using AUS bank account… would help if you can point out the specific section or circular for my reference. Regarding the source for remittance to India I will re-check with my bank and CA. I too agree equity investment is good for stable/long-term returns but think this trading has it’s own significance and can be a small part of the total portfolio.

                      Thanks once again!
                      Shrikanth

  71. hello Sir,

    Having read and heard abut this a lot there is not doubt that Forex trading is illegal in India. But thousands of Indian traders are still involved in it and the numbers are continuing to increase. I’m not yet involved in any such trading but the question that crosses my mind is “What is it in Forex trading that makes it so illegal?” Why RBI has problems with Indian traders trading Forex?

    thanks.

    Reply
    • Vipul-Place where trading takes place are the countries which have loose law against money laundering. So if RBI permits this then easily a best route for illegal activity.

      Reply
      • Sir,

        So if money laundering is what RBI is trying to prevent that means Indians are being kept away from an amazing money making opportunity just because there are no proper regulations in India towards Forex trading. Instead of restricting people don’t you think RBI should have a proper regulating body for Forex trading to solve the issue.
        What do you think?

        Thank You.

        Reply
        • Vipula-It is not a problem of RBI but the problem of countries where trade get executed. These countries have loose laws. Hence to safe guard the Indian economy RBI must act so.

          Reply
          • Sir,

            “Safeguard our Economy” Is this what RBI says?
            I wonder why in the US, Europe, Australia and UK the regulating bodies feel otherwise. Why don’t they feel it necessary to take such steps to “safeguard their economy”?

            Thank you.

            Reply
            • Vipula-Economical or in other words the countries you mentioned are not reeling under black money or some other financial threats to that extent than India. Also what is the point in following the so called BIG BOSS blindly? To be frank such forex trading offerings will not be from US, Europe or Australia but from the countries like Indonasia or some other third world countries.

              Reply
              • thank you I appreciate the response.

                Reply
                • there are forex company’s based in australia, uk, new zealand, germany etc, and that info provided by him that forex services are provided only by third world countries is inaccurate and very prejudiced, there are many local and international traders in fx based from those countries, money laundering are allowed by big indian fishes to hide their black money but not by law abiding regular resident indians who does forex for bread making activity is a very dual sided, discriminated, prejudiced and marginalized policy… hope rbi at least check on the indian traders credentials and allow them to do conditional forex trading if they are that scared of loosing money by sending amounts less than 5000 usd per year

                  Reply
                  • Bharath-Thanks for commenting πŸ™‚ But why those Australian Forex Brokers not luring Indian investors? Why only from third world countries??

                    Reply
      • Hello Sir! thanks for bringing your experience in to public,this gave me chance to clear my doubts about Forex Trading πŸ˜€ Sir i’m good at Forex trading and i’m earning decent income there,but i didn’t invest any money on my own,i received a bonus from a broker for winning a contest and using that bonus i improved my trading balance and planning to withdraw some.So, when i read about RBI regulations i haapened to see this FAQ

        “Q.27. Can a person resident in India hold assets outside India?

        Ans. In terms of sub-section 4, of Section (6) of the Foreign Exchange Management Act, 1999, a person resident in India is free to hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India if such currency, security or property was acquired, held or owned by such person when he was resident outside India or inherited from a person who was resident outside India.”

        So my first question is can i receive money from a Electronic payment processor like Moneybooker or Skrill instead of individual outside India? As this company is situated out India but has a branch in India,so even i withdraw through this processor and mention source of income as “Forex investment” that shouldn’t be a problem right? I mean it should be like Gift or insurance for sure?

        If above process is not available the only way is to open a bank account outside India πŸ™ Is it possible?)

        Reply
        • Sidhu-You are understanding it wrongly. Please add your shared RBI ruling with what I shared above regarding holding currency derivatives. Then you will find differentiation. If you transfer through any means and mentioned as Forex Investment then they may unearth the source of investment, where it is invested and whether it is legal or not. So you need to answer all those questions. Opening bank account in your name outside India is solution. But will the country where you are intended to open account is so free that any outsider can open account and transfer funds as their wish?? Think and decide.

          Reply
  72. Sir I have already transferred some money in the account of aforesaid company but yet not started any transaction. After reading your article now I don’t want to trade with them. Can I withdrawn my money safely?

    RAVI

    Reply
    • Ravi-It is better to withdraw immediately, stop trading and if possible close the account.

      Reply
  73. Sir my question to use is supppose I withdraw funds from these online brokers via e-banks like neteller,moneybookers,etc will it be legal as in my bank statement it will show these e banks names and then I can pay taxes as income from other sources

    Reply
    • Ranmeet-You are right that in bank transactions it will not reflect directly to broking firm. But the question is how and what you mention the source of income, even if you mentioned the income category as “Income from Other Source”?

      Reply
  74. I think only particular comment you are allowing to post on your blog so only i am not able to post the comment so here is my reply from another mail id…you telling about a company rubbish where i invested and getting proper withdrawals.But i have checked about you DSP blackrock where there are lot of withdrawals in pending,so how can you say yourself you are a certified financial planner? so try to sort out the issues in your DSP blackrock where you act as a certified financial planner adviser bla bla bla…

    Reply
    • Pandian-For your information any new reader who comment on blog will first need to approve by me. This is done to protect genuine commenting. Now you are very much free to view your comment and my reply. Also changing name from “Arun” to “Pandian” by commenting from the same IP Address will not mean that you are different reader who is commenting as “Arun”. Both of yours IP address are same. Hence technology is very advance and don’t do such silly things here πŸ™‚ Also for your information I am in no way associated with DSP BlackRcok (as you both are thinking), I think the blogger meet photo published on “About BasuNivesh” is prompting you arrive this decision. But for your information DSPBR actually conducted Blogger Meet and I was one of them among top Indian Bloggers whom they called for meet. You can very much raise your voice against DSPBR, I don’t have any issue. Because I am independent planner.

      Reply
      • Since i am not able to comment on the previous mail id replied from another and in that itself i clearly told that i am replying from another mail address…,So i just checked with the change in name can approve the post in the blog….Now all same my full name is arun pandian u can check my mail id…and can u explain me about the question i asked in the previous message

        Reply
        • Arun Pandian-You can check my reply and for your information, I am not at all connected with any company. I am working independent. So no need to name any one company. You are very much free to raise that particular company issue (DSPBR). I don’t have any issue. Please check my previous comment where I already replied.

          Reply
  75. Mr. Basavaraj I have invested in the same company which you told and i am getting good returns…and one more thing to be added SEBI have no work with NYSE similarly SEBI have nothing to do with (JFX Jakartha Futures Exchange)..I have gone through the conversation the executive reply for all your queries is wright…If u keep on asking doubts no one will answer…if the doubt is really good every one will answer….and one more doubt are acting as a consultant for any other trading company???

    Reply
    • Arun-Thanks for your defensive stance πŸ™‚ Being an investor I have every right to ask questions. If something is not as per rule of land then one must not proceed. That is what I pointed. Also may I know what is connection being me being consultant of any trading company and to this issue? Please elaborate more on this so that readers will come know who stands where.

      Reply
      • As a investor you have rights to ask n number of questions but when the answer is given you have to realize
        the gen unity of the answer…so from the things i told in previous conversation i think you might have got the knowledge about the participation of sebi in international market….When a person from abroad coming India to trade in Indian market which SEBI? is going to help him in his country where he is staying(e.g Canada)…And do you have any relationship with DSP Blackrock??

        Reply
        • Arun-Thanks for commenting. May I know how it is taxed in India on the gains from such trades? I need to pay tax to Govt as I earned from my investment. Hence let me know which Income Tax rule govern such earnings? Never try divert issue about rising the Canada citizen. Regarding my relationship with DSP BlackRock…why can’t you ask them directly? You are more concerned about my relationship with other existing financial institutions rather than resolving the basic point like “Forex Trading in India is legal or not” (from regulatory point of view, but not from your point). If I have any relationship with Indian financial institution also then it will be very much within the legality of Indian law. So I am very much open to this. Can we proceed further on this?? πŸ™‚

          Reply
          • All the the investments Which goes from India comes under NRI scheme of investment..The company Which i have invested is fully regulated and i have never faced any difficulties in withdrawal either the Equity or profit…but when i checked with DSP Black Rock…there are lot of issues in the withdrawal which are pending for such a long time and i saw the review of your concern and the reviews are relay bad..So, how you can be a certified financial planner please explain me…

            Reply
            • Arun-According to Income Tax law I am Resident Indian and If I do this trade then suddenly how my status will change to NRI? Also let me know one thing, what type of withdrawal are pending since long with DSPBR? If you are pointing towards mutual fund, then friend please read the redemption procedure set by SEBI-maximum time it will take up is 5 working days. No one can delay the withdrawal (apart from genuine reasons). May I know which of my review is bad? May I know in which company you invested so that I can take up with issue further to doorstep of SEBI or RBI please πŸ™‚ I am certified financial planner because I am promoting legality and rule of land. If you have any concern on this then you can very much free to complain to rewarded body.

              Reply
              • I seriously laugh at Arun Pandiyan. He has absconded when asked about the company name. Lol.

                Reply
  76. Nice article…..I know this company and believe me investors are making huge money ranging from 25k to 50 k dollars….and transaction happening through Indian banks…but y they r not getting caught??….the company is running In Bangalore for past 5 yrs and have around 8 branches across india….how the company still surviving?!…even broker’s working thr earning commission in dollars..if it is illegal how the company still surviving?!..now they stopped trading in currencies but still trading in commodities and US stocks claiming that it is legal and they got certifications which is mentioned in website.!

    Reply
    • Abdul-You are right and are operating in a daylight without any fear or regulators. It happens only in India πŸ™‚

      Reply
  77. Dear Sir,
    I am planning to buy a BDA site in Bangalore and then came to know the original documents are missing from the current seller but all other relevant documents are available like alotment from BDA and sale deeds from the previous seller and EC is OK and in BDA office all the documents are no issue.
    Please advise

    Reply
    • Ramakrishna-This is not relevant to the above post. I request you to visit the “Contact Us” page and submit your request there. We will reply.

      Reply
      • Hello sir,
        Will u please let me knw trading in commodities through iforex.in is legal in india or not. They are taking wire transfer from bank in indian rupee too. Can we go ahead n start business with them And if we earn profit from there that we can take in our account and pay taxes on that

        Reply

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