Indian media has been filled with various FX brokerages advertising their services. This is why many people got curious whether trading currencies online is actually legal in India. In this article we are going to sort out all of the doubts.

It is partially legal

When looking at the online rating websites like www.toponlineforexbrokers.com, you will quickly see a large list of FX brokerages that are serving Indian customers. However, don’t be fooled, a broker that is based somewhere in Belize or Seychelles cannot be charged by the Indian authorities. However, you, as an Indian resident, may be held liable. And this is not something you want to happen. So, is it actually illegal and what are the restrictions?

FX trading in India is legal, yet it is restricted to the currency pairs that contain Indian Rupee in it. In other words, you are completely fine trading any of the following pairs online:

• USD/INR

• JPY/INR

• GBP/INR

• EUR/INR

This means that you can trade US Dollars, Japanese Yen, Great Britain Pound and European Euro against Indian Rupee. And this activity will be completely legal and inline with the current regulation.

However, once you start trading any other currency pair, like EURUSD, you may actually be held liable by the Securities and Exchange Board of India.

Having said this, the practice is not enforced often. And considering the fact that most of the FX brokers are actually hosting outside of India, you data remains protect from the authorities. Nevertheless, FX trading is a high risk itself, and trading currencies in India may result in additional legal penalties. Hence, you will be much better off staying away from it.