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Forex trading in India

Forex trading in India: restrictions


The foreign exchange market is a global market, which means traders all over the world can participate in trading currencies. However, every country has its own regulating requirements for brokers companies and traders. For example, if you want to do Forex trading in India, you should choose currency pairs which have Indian Rupee as a quoted currency. They are, for instance, USD/INR, EUR/INR, GBP/INR or JPY/INR.

Reserve Bank of India (RSI) restricted trading with any foreign currency to prevent investments in overseas markets. There is such a restriction not only in India, but also in USA. The US traders have to choose brokers regulated by national Futures Association (NFA) and Commodity Futures Trading Commission (CFTC). The same we can say about Forex trading in Canada. Three organizations: The Financial Transactions and Reports Analysis Centre of Canada (FTRACC), The Ontario Securities Commission (the OSC) and the British Columbia Securities Commission (the BCSC) regulate brokers’ activity in Canada.

As you can see, there are restrictions on Forex trade in the particular countries, so people often ask a question, “Why forex trading is illegal in India?” It is not illegal, but traders from India have to take into account the restrictions we have mentioned above.

Forex trading in India is regulated by FEMA, which means Foreign Exchange Management Act. It prevents trading Forex both domestic and overseas markets using currency pairs without Indian Rupee. We believe that the main of the Forex trading tips in India is to find a reliable broker. One of the goal of these restrictions is to protect the citizens from investing their money in overseas markets. You should remember that the Forex trade is a risky business and sometimes traders lose their funds. To insure your deposit and your trading you should choose a broker carefully. Study a broker’s experience attentively and check trading conditions before to open an account in the company.

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