If your goal is to trade Forex in India – there are not many differences from the other countries of the world in terms of starting it. Yet when you’ve started, it might get more challenging than you expected because of many setbacks from the government. We’ll figure it out for you step by step, and hopefully, after reading this, you’ll have an opinion on whether or not it’s worth entering Forex in India.
To start trading Forex as a citizen of India, you’ll need just two things: a bank account and a Forex account. We assume you won’t need any help with the first one, but the second one requires a bit of clarification. First of all – make sure that the broker you pick for your purposes has a license with SEBI (Securities and Exchange Board for India) and abides by the FEMA (Foreign Exchange Management Act). Trading via an unlicensed brokerage firm in India is a punishable offense, and you might want to refrain from that. These two conditions are mandatory, and everything else depends on your preferences.
For example, you might want to trade with an internationally recognized firm with a broad assortment of account types and dozens of available payment systems. If you want it to have a comprehensive guide on every aspect of Forex Trading in India, as well as anywhere else around the globe – you’re definitely looking for JustForex.
Forex regulations in India
Forex trading is gaining popularity worldwide, but in India, it’s falling behind a bit due to some regulatory issues, which we’re going to discuss here. First, you need to know that all Forex trading in India is strictly regulated, and you can only trade currency pairs where major currencies are benchmarked against an Indian Rupee (INR). The main reason for that is that INR is weak against the USD, and the government wants to prevent the Indian foreign currency reserve intact through artificial measures.
In other words, if you’re a citizen of India – you can only trade EURINR, GBPINR, JPYINR, and USDINR. Since December 2015, three more pairs became available for cross-currency futures and exchange-traded options: EURUSD, GBPUSD, and USDJPY. Trading all other pairs is illegal under the FEMA act. Yet, one cannot say that it stops Indian citizens from trading Forex. Even with those limitations, the potential is astounding, and the currency market fluctuations allow one to have a stable income while remaining independent.
Why starting Forex trading in India?
India is situated comfortably between the timezones of the biggest exchanges in Asia and Europe. So if you’re trading from India, you won’t have to skip your sleep or work to be there during the busiest Forex trading hours, which is essential for those who haven’t yet decided on whether they can make Forex their primary source of income.
Another great advantage is that India is still a relatively new market for Forex brokers, meaning that they have to enter it with excellent conditions and attractive offers to acquire new customers and win the market. If you try to compare the benefits you can get in India with the ones traders are getting in the US or Western Europe – you’d be astounded.
And the best thing is – Forex offers you stability and independence if you treat it as you should – like your job. You learn, get better, accumulate knowledge and experience, and become a professional. It’s the only way to become successful in any business, and you should avoid anyone who tries to convince you otherwise.