| Updated: June 19, 2025If you are interested in trading foreign currencies in India, this publication offers valuable insights into the local regulatory landscape. Our team of experts at BestBrokers has singled out several licensed brokers that cater to the needs of Indian traders, and we thoroughly tested each option by creating live accounts and placing real trades.
Forex trading has grown in popularity in India recently as the net disposal income has increased, providing citizens with more room to explore investment opportunities. However, India’s financial watchdogs impose strict restrictions on what products domestic entities can offer to clients, making the overall regulatory environment quite complex. Therefore, the primary option for Indian traders to engage in the forex market is through foreign brokers.
Fusion Markets74-89% of retail's CFD accounts lose money
FP Markets73.85% of retail investor accounts lose money
ActivTrades72% of retail investor accounts lose money
BlackBull MarketsTrading leveraged products is risky
Global Prime74-89% of retail CFD accounts lose money
AxiThe vast majority of retail client accounts lose money
Eightcap59.57% of retail investor accounts lose money when trading CFDs with this provider.
easyMarkets71% of retail investor accounts lose money
FXCM70% of retail investor accounts lose money
Capital.com70% of retail investor accounts lose money when trading CFDs with this provider.Indian Forex Brokers Ranked by Trustpilot Score
| Forex Broker | Trustpilot Reviews | |
|---|---|---|
| 1. FP Markets | 8,641 | 4.9 ⭐ |
| 2. Forex.com | 2,069 | 4.7 ⭐ |
| 3. Fusion Markets | 3,162 | 4.7 ⭐ |
| 4. Global Prime | 247 | 4.6 ⭐ |
| 5. Capital.com | 12,456 | 4.5 ⭐ |
| 6. Spreadex | 145 | 4.4 ⭐ |
| 7. easyMarkets | 1,714 | 4.3 ⭐ |
| 8. Eightcap | 3,052 | 4.2 ⭐ |
| 9. FXCM | 655 | 4 ⭐ |
| 10. Iron FX | 657 | 3.1 ⭐ |
Indian Forex Brokers Ranked by Spread Commission
| Forex Broker | EURUSD | USDJPY | EURGBP | GBPUSD |
|---|---|---|---|---|
| 1. FP Markets | 1.2 | 1.4 | 1.4 | 1.5 |
| 2. Fusion Markets | 1.01 avg (Classic) | 1.17 avg (Classic) | 1.29 avg (Classic) | 1.14 avg (Classic) |
| 3. Global Prime | 0.96 avg (Standard) | 1.47 avg (Standard) | 1.19 avg (Standard) | 1.12 avg (Standard) |
| 4. Capital.com | 0.6 | 1.0 | 2.0 | 1.3 |
| 5. FXCM | 1.3 | 1.4 | 2.3 | 1.7 |
| 6. Spreadex | from 0.6 | from 0.7 | from 0.9 | from 0.9 |
| 7. Iron FX | 1.2 | 0.9 | 1.0 | 1.3 |
| 8. easyMarkets | 0.7 | 1.2 | 1.0 | 1.3 |
| 9. Eightcap | 1.00 (min) | 1.1 | 1 | 1 |
| 10. Forex.com | 1.0 min (Standard) | 0.9 min (Standard) | 1.3 min (Standard) | 1.3 min (Standard) |
Indian Forex Brokers Ranked by Commission per Lot
| Forex Broker | Commission per lot |
|---|---|
| 1. easyMarkets | $0 |
| 2. Eightcap | $0 on Standard and TradingView Accounts; $7 round turn on Raw Accounts |
| 3. Spreadex | $0 |
| 4. FXCM | $0 |
| 5. Forex.com | $0 for Standard accounts; $5 per standard lot per side for Raw accounts |
| 6. Iron FX | $0 Standard Account; $18 Live Zero Fixed Spread; $10 STP/ECN Zero Spread; $6 STP/ECN Zero Spread Professional |
| 7. Capital.com | $0 |
| 8. Fusion Markets | $0 Classic Account, $4.50 round turn on Zero Account |
| 9. FP Markets | $0 Standard Account; $6 round turn on Pro Account |
| 10. Global Prime | $0 Standard Accounts; $7 round turn on Raw Accounts |
Important Note: This publication aims to provide a comprehensive overview of the legality of forex trading in India, so stay with us to find out more and navigate the forex investment market with confidence. The Securities and Exchange Board of India, or SEBI, is the financial regulatory institution in India. Traders can refer to its official website, https://www.sebi.gov.in/index.html for further information or look up its X (former Twitter) account @SEBI_news.
Top 10 FX Brokers in India
Fusion Markets Broker Details Supports Hindi No Indian Currency (INR) No Regulators ASIC, FSA (Seychelles), VFSC (Vanuatu) Min Deposit $0 Trading Platforms MetaTrader4, MetaTrader5, cTrader, DupliTrade, Fusion+ Copy Trade, TradingView Trustpilot Rating 4.7 out of 3,162 reviews Number of CFD Forex Pairs to Trade 80+ Leverage Forex & Metals CFDs: 1:30 (1:500 for forex and metals via VFSC)
Index CFDs: 1:5
Cryptocurrencie CFDs: 1:2 (ASIC), 1:10 (FSA, VFSC)Spread EURUSD: 1.01 avg (Classic)
USDJPY: 1.17 avg (Classic)
EURGBP: 1.29 avg (Classic)
GBPUSD: 1.14 avg (Classic)Forex Commission per Lot per Trade $0 Classic Account, $4.50 round turn on Zero Account Deposit Methods Visa, Mastercard, PayPal, Skrill, Neteller, Fasapay, Jeton Wallet, Perfect Money, Online Naira, Doku, Bitcoin, Ethereum, Litecoin, USDT, Tether, Ripple, bank wire, ZotaPay, VNPay, DuitNow, XPay, DragonPay, VAPay, FasaPay, AstroPay, PayID, Jetonbank, Sticpay, Interac, LuqaPay, Zotapay, MiFinity Withdrawal Methods Visa, Mastercard, Bank Wire, Skrill, Neteller,Bitcoin, Ethereum, Litecoin, Tether, Ripple, MiFinity, Interac, PayPal, AstroPay, Jetonbank, DragonPay Key Pros
- Offers some of the lowest spreads
- ASIC clients enjoy a negative balance protection
- Supports popular trading platforms
- Offers two copy trading platforms
- Supports fiat and crypto payment solutions
Key Cons
- Does not offer investor protection
- Traders outside Australia have no negative balance protection
- Cannot set up an account in a minor currency
- Has no FCA license
Global Prime Broker Details Supports Hindi No Indian Currency (INR) No Regulators ASIC (No. 385620), VFSC (No. 40256) Min Deposit $0 Trading Platforms MT4, MT4 Webtrader, MT4 Android; for VFSC clients MT4, MT5, and GP Copy Trustpilot Rating 4.6 out of 247 reviews Number of CFD Forex Pairs to Trade 56 Leverage Forex & Metals CFDs: 1:500 (1:30 for ASIC entity)
Index CFDs: 1:100 (1:20 for ASIC entity)
Cryptocurrencie CFDs: Up to 1:2 (ASIC); Up to 1:5 (Pro and VFSC)Spread EURUSD: 0.96 avg (Standard)
USDJPY: 1.47 avg (Standard)
EURGBP: 1.19 avg (Standard)
GBPUSD: 1.12 avg (Standard)Forex Commission per Lot per Trade $0 Standard Accounts; $7 round turn on Raw Accounts Deposit Methods Visa, Mastercard, PayPal, Skrill, Neteller, Gate8, Dragonpay, Fasapay, VNPay, Pagsmile, BPay, POLi, AstroPay, Bank Transfer, Interac, Perfect Money, PayID, Jeton, MiFinity, XPay, Crypto Withdrawal Methods Mastercard, Visa, Local Bank Transfer, Bank Wire Transfer, Skrill, Neteller, AstroPay, PayPal, Dragonpay, Perfect Money, Jeton, Interac, Cryptocurrencies
Key Pros
- Overseen by a top-tier financial regulator (ASIC)
- No fees on deposits and withdrawals
- Low fees for FX trading
- Streamlined sign-up process
- A broad range of currency pairs
Key Cons
- Could use more trading platforms
- A limited range of educational resources
- Does not offer Islamic or cent accounts
ActivTrades Broker Details Supports Hindi No Indian Currency (INR) No Regulators FCA (UK), CMVM (Portugal), CVM (Brazil), SCB (Bahamas), FSC (Mauritius) Min Deposit $0 Trading Platforms ActivTrader, TradingView, MT4, MT5 Trustpilot Rating 4.5 out of 1,460 reviews Number of CFD Forex Pairs to Trade 56 Leverage Forex & Metals CFDs: 1:30 (1:400 Bahamas)
Index CFDs: 1:20 (1:200 Bahamas)
Cryptocurrencie CFDs: 1:2 (1:20 Bahamas)Spread EURUSD: 0.50
USDJPY: 0.50
EURGBP: 0.80
GBPUSD: 0.80Forex Commission per Lot per Trade $0 Deposit Methods Visa, Mastercard, PayPal, Apple Pay, Google Pay, Skrill, Neteller, Bank Transfer, Cryptocurrencies Withdrawal Methods Visa, Mastercard, PayPal, Skrill, Neteller, Bank Transfer, Cryptocurrencies Key Pros
- Holds an FCA license since 2009
- Safeguards all traders with negative balance protection
- Stores customer funds at first-tier banks like Barclays and Lloyd’s
- Supports free PayPal deposits and withdrawals
Key Cons
- Additional fees on deposits with cards
- Charges administrative fees after 50 weeks of inactivity
easyMarkets Broker Details Supports Hindi No Indian Currency (INR) No Regulators CySEC (license no. 079/07), ASIC (license no. 246566), FSA (license no. SD056), FSCA (54018), and FSC (license no. SIBA/L/20/1135) Min Deposit $25 Trading Platforms easyMarkets Web/Mobile, MetaTrader 4, MetaTrader 5, TradingView Trustpilot Rating 4.3 out of 1,714 reviews Number of CFD Forex Pairs to Trade 95+ Leverage Forex & Metals CFDs: 1:30
Index CFDs: 1:20
Cryptocurrencie CFDs: 1:2Spread EURUSD: 0.7
USDJPY: 1.2
EURGBP: 1.0
GBPUSD: 1.3Forex Commission per Lot per Trade $0 Deposit Methods Visa, Mastercard, JCB, Amex, Skrill, Neteller, Fasapay, Sofort, iDEAL, Web Money, BPay, Bank Transfer Withdrawal Methods Visa, Mastercard, JCB, Amex, Skrill, Neteller, Fasapay, Sofort, iDEAL, Web Money, BPay, Bank Transfer Key Pros
- Offers tight spreads and low fees
- Supports trading of over 90 currency pairs
- Regulated by several reputable authorities
- Supports a wide range of payment methods
- Offers a proprietary platform
Key Cons
- Number of supported products is somewhat limited
- Does not offer copy trading platform
- Traders from certain countries may have access to fewer payment methods
BlackBull Markets Broker Details Supports Hindi No Indian Currency (INR) No Regulators FSA (Seychelles) (No. SD045), FMA (No. FSP403326) Min Deposit $0 (Standard)$2,000 (Prime)$20,000 (Institutional) Trading Platforms MetaTrader4, MetaTrader5, TradingView, cTrader, MT WebTrader, BlackBull Shares, BlackBull CopyTrader, BlackBull Trade, BlackBull Invest, ZuluTrade Trustpilot Rating 4.8 out of 1,876 reviews Number of CFD Forex Pairs to Trade 70+ Leverage Forex & Metals CFDs: 1:500
Index CFDs: 1:500
Cryptocurrencie CFDs: 1:500Spread EURUSD: 0.9
USDJPY: 1.2
EURGBP: 1.7
GBPUSD: 1.2Forex Commission per Lot per Trade $0 Standard; $6 per lot Prime; $4 per lot Institutional Deposit Methods Visa, Mastercard, Neteller, Airtm, Skrill, Bank Transfer, HexoPay, American Express, POLi, Payment Asia, Help2Pay, FXPay, Fasapay, China Union Pay, Boleto, AstroPay, Beeteller, Bitcoin, Ethereum, Tether, Ripple, Litecoin, Bitcoin Cash, Chainlink, USD Coin, Stellar Withdrawal Methods Visa, Mastercard, Bank Transfer, Airtm, Skrill, Neteller, American Express, POLi, HexoPay, Payment Asia, Help2Pay, FXPay, China Union Pay, Boleto, Fasapay, Beeteller, AstroPay, Bitcoin, Litecoin, Bitcoin Cash, Tether, Ripple, Stellar, Chainlink, Ethereum, USD Coin Key Pros
- Uses proprietary copy-trading platform
- Swap-free trading via ECN Standard and Prime accounts
- Multi-platform support
- Provides a 24/7 customer support service
- Great Education Hub for traders looking to hone their skills
Key Cons
- High commissions per lot on Prime and Institutional accounts
- Charges a $5 fee on withdrawals
Eightcap Broker Details Supports Hindi No Indian Currency (INR) No Regulators SCB (No. SIA-F220), ASIC (No.391441), CySEC (No. 246/14), FCA (No. 921296), SCA Min Deposit $100 Trading Platforms MetaTrader4, MetaTrader5, WebTrader, TradingView, Capitalise.ai, FlashTrader Trustpilot Rating 4.2 out of 3,052 reviews Number of CFD Forex Pairs to Trade 50+ Leverage Forex & Metals CFDs: 1:30
Index CFDs: 1:20
Cryptocurrencie CFDs: 1:2Spread EURUSD: 1.00 (min)
USDJPY: 1.1
EURGBP: 1
GBPUSD: 1Forex Commission per Lot per Trade $0 on Standard and TradingView Accounts; $7 round turn on Raw Accounts Deposit Methods Visa, PayPal, Mastercard, Wire Transfer, Neteller, Skrill, Tether, Bitcoin, BPAY, Dragonpay, Fasapay, Interac, Pix, UnionPay Withdrawal Methods Mastercard, Visa, PayPal, Skrill, Neteller, Bitcoin, Tether, Wire Transfers, BPay, Fasapay, Pix, Interac, UnionPay Key Pros
- Commission-free FX trading via standard accounts
- Spreads from 0 pips on major currency pairs
- Accepts cryptocurrency deposits
- Fantastic variety of deposit and withdrawal methods
- Insights section with webinars, trade ideas, and weekly forecasts
Key Cons
- Below-average range of tradable instruments
- Crypto withdrawals incur transaction fees
Spreadex Broker Details Supports Hindi No Indian Currency (INR) No Regulators FCA (No. 190941) Min Deposit $0 Trading Platforms TradingView, proprietary software Trustpilot Rating 4.4 out of 145 reviews Number of CFD Forex Pairs to Trade 60+ Leverage Forex & Metals CFDs: 1:30
Index CFDs: 1:20
Cryptocurrencie CFDs: 1:2Spread EURUSD: from 0.6
USDJPY: from 0.7
EURGBP: from 0.9
GBPUSD: from 0.9Forex Commission per Lot per Trade $0 Deposit Methods Mastercard, Visa, Maestro, Direct Debit, Check, Bank Transfer Withdrawal Methods Visa, Maestro, Mastercard, Bank Transfer, Check Key Pros
- Provides access to over 10,000 tradable symbols
- Well-designed and intuitive mobile trading app
- Offers spread betting on FX pairs
- Commission-free FX trading with tight spreads
- Seamless registration process
Key Cons
- No support for MetaTrader 4 or 5
- Licensed by a single financial regulator (FCA)
- Deposits under $/£50 may incur additional charges
FXCM Broker Details Supports Hindi No Indian Currency (INR) No Regulators FCA, CySEC, ASIC, FSCA, ISA, FSA (St. Vincent and the Grenadines) (license no. 1776) Min Deposit $50 Trading Platforms MetaTrader 4, TradingView Pro, Trading Station, Capitalise.ai Trustpilot Rating 4 out of 655 reviews Number of CFD Forex Pairs to Trade 40+ Leverage Forex & Metals CFDs: 1:30
Index CFDs: 1:20
Cryptocurrencie CFDs: 1:2Spread EURUSD: 1.3
USDJPY: 1.4
EURGBP: 2.3
GBPUSD: 1.7Forex Commission per Lot per Trade $0 Deposit Methods Visa, Mastercard, Bank Transfer, Neteller, Skrill, Google Pay, Open Banking, Apple Pay, PayPal, Paysafecard, BPAY Withdrawal Methods Visa, Mastercard, Bank Transfer, PayPal, Neteller, Skrill Key Pros
- Offers up to 1:1,000 leverage on all new accounts (FSA)
- Supports popular trading platforms
- Does not charge depositing and withdrawal fees
- Regulated by multiple top-tier regulators
- Offers competitive spreads
Key Cons
- Charges a rather high inactivity fee
- Offers limited number of products
- Number of currency pairs is average
Forex.com Broker Details Supports Hindi No Indian Currency (INR) No Regulators ASIC, MAS, FCA, CIRO, JFSA, CFTC, CySEC, CIMA, CySEC Min Deposit $100 Trading Platforms MetaTrader 4, MetaTrader 5, TradingView, WebTrader, NinjaTrader Trustpilot Rating 4.7 out of 2,069 reviews Number of CFD Forex Pairs to Trade 80+ Leverage Forex & Metals CFDs: 1:30
Index CFDs: 1:20
Cryptocurrencie CFDs: 1:2Spread EURUSD: 1.0 min (Standard)
USDJPY: 0.9 min (Standard)
EURGBP: 1.3 min (Standard)
GBPUSD: 1.3 min (Standard)Forex Commission per Lot per Trade $0 for Standard accounts; $5 per standard lot per side for Raw accounts Deposit Methods Visa, Mastercard, Skrill, Neteller, Wire Transfer, PayPal Withdrawal Methods Visa, Mastercard, Wire Transfer, Neteller, Skrill, PayPal Key Pros
- Supports a great selection of trading platforms
- Enables easy mobile trading
- Offers over 80 currency pairs
- Provides a vast variety of over 6,000 products
- Forex spreads can be very competitive
Key Cons
- Navigating the platforms can be difficult for beginners
- Instruments on MT4 are significantly fewer than other platforms
- Charges monthly fee after 12 months of inactivity
10. Capital.comTRADE NOW 70% of retail investor accounts lose money when trading CFDs with this provider.Capital.com Broker Details Supports Hindi No Indian Currency (INR) No Regulators ASIC, FCA, CySEC, SCB, SCA (UAE) Min Deposit $20 ($50 for wire transfers) Trading Platforms MetaTrader 4, TradingView Trustpilot Rating 4.5 out of 12,456 reviews Number of CFD Forex Pairs to Trade 130+ Leverage Forex & Metals CFDs: 1:30
Index CFDs: 1:20
Cryptocurrencie CFDs: 1:2Spread EURUSD: 0.6
USDJPY: 1.0
EURGBP: 2.0
GBPUSD: 1.3Forex Commission per Lot per Trade $0 Deposit Methods Bank transfers, VISA, MasterCard, Maestro, Apple Pay, PayPal, Neteller, Skrill, Sofort, Przelewy, TrueLayer, iDEAL, Trustly, SPEI, Volt, Lean, USDT Withdrawal Methods Bank transfers, bank cards, Apple Pay, PayPal, Neteller, Skrill, Sofort, Trustly Key Pros
- Trusted by 740,000 traders across the globe
- Trading guides for beginner, intermediate, and advanced traders
- Mobile apps for Android and iOS devices
- Low FX fees built into the spread
- Negative balance protection
Key Cons
- There is an inactivity fee after 1 year
- Capital.com does not accept US, Canadian, and Belgian customers
- Only CFD trading is supported
FP Markets Broker Details Supports Hindi No Indian Currency (INR) No Regulators ASIC, CySEC, FSA (Seychelles), FSCA, FSA (St. Vincent and the Grenadines), SCB (Bahamas) Min Deposit $50 (AU$100) Trading Platforms MetaTrader4, MetaTrader5, WebTrader, IRESS, cTrader, TradingView Trustpilot Rating 4.9 out of 8,641 reviews Number of CFD Forex Pairs to Trade 70+ Leverage Forex & Metals CFDs: 1:30
Index CFDs: 1:20
Cryptocurrencie CFDs: Up to 1:2 (Retail); Up to 1:5 (Pro)Spread EURUSD: 1.2
USDJPY: 1.4
EURGBP: 1.4
GBPUSD: 1.5Forex Commission per Lot per Trade $0 Standard Account; $6 round turn on Pro Account Deposit Methods Visa, Mastercard, Neteller, Bank Transfer, Skill, Sticpay, Fasapay, Virtual Pay, Perfect Money, Pagsmile, Dragonpay, Crypto, Apple Pay, Google Pay, Online Banking, Broker to Broker, PayPal, XPay, Rapyd Withdrawal Methods Visa, Mastercard, Bank Wire, Neteller, Skrill, Paytrust88, PayPal Key Pros
- Offers plenty of educational trading tools
- Broker with competitive spreads
- Allows easy trading on the go
- Regulated by reputable authorities
- Offers a decent number of currency pairs
Key Cons
- Supported trading platforms are a tad outdated
- Could expand selection of products
- No negative balance and investor protection for clients under ASIC
Is Forex Trading Legal in India?
While the popularity of Forex trading in India is undeniable, certain limitations make the journey to this investment opportunity fraught with challenges.
Brokers licensed by the Securities and Exchange Board of India do not offer traditional forex trading to Indian residents due to local restrictions. However, many offshore brokerages accept clients from the country despite lacking permits from the local authority. As a result, the Reserve Bank of India has issued multiple warnings against such companies. Mechanisms limiting payments to foreign forex brokers without a SEBI license have also been implemented by the Central Bank of India.
Individuals who stick to locally regulated entities will find that trading is limited to specific currency pairs including 4 Indian rupee pairs and 3 non-INR Forex pairs. The first group includes the USD/INR, EUR/INR, JPY/INR, and GBP/INR pairs, and the second – EUR/USD, GBP/USD, and USD/JPY. Furthermore, they must be traded as currency futures or derivatives.
Although traders are usually advised to use brokerages regulated by the financial monitoring institution in their country, the above limitations may prompt traders to look beyond their national borders and see what the offshore market has in store for them. With this in mind, we welcome you to check out our carefully selected list of reputable brokers accepting traders from India.
The Securities and Exchange Board of India Regulation Info
Founded in 1988, the Securities and Exchange Board of India (SEBI) regulates the securities and commodity market in India and acts under the administrative domain of the Ministry of Finance. It was authorized to monitor the industry under the SEBI Act of 1992, which was passed by the Indian Parliament.
Headquartered in Mumbai, the SEBI has Regional Offices in New Delhi, Kolkata, Chennai, and Ahmedabad. SEBI’s board of members includes the chairman, two members from the Union Finance Ministry, one member from the Reserve Bank of India, and five members nominated from the Union Government of India.
The main functions of the watchdog are “to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.” Three groups fall under the oversight of SEBI – issuers of security, investors, and market intermediaries.
The regulatory powers of SEBI encompass multiple functions, including approving by-laws of Securities exchanges, inspecting the book of accounts of financial intermediaries, overseeing the registration of brokers and sub-brokers, and ensuring the transparency of the security market, among others.
The Reserve Bank of India (RBI) monitors the broader institutional market in India, such as the operation of banks and financial institutions. The SEBI and the RBI act as India’s main financial regulators.
How Can I Verify SEBI Authorization?
Indian Forex traders can check the authorization status of their selected broker by navigating to the disclosure text usually found at the bottom of the website’s homepage. The licensing information typically includes the name of the company, its SEBI registration number, registered office, and contact details.
Furthermore, traders can look up SEBI’s register of authorized brokers in India by navigating to the official website of the institution: https://www.sebi.gov.in/.
Are My Funds Safe with Forex Brokers in India?
Much like other trading and investment options, forex entails risk and may result in loss of capital due to poor decisions and market volatility. Traders must consider various factors such as their risk tolerance, available investment budget, and the reliability of their selected broker. This is why going with brokers that boast licenses from reputable regulatory bodies is crucial.
It is also advised that one trades with brokers who offer “stop-loss” orders along with negative balance protection, which will serve to limit the potential losses from trades. Beyond this, any reputable broker will hold client funds in segregated bank accounts separate from the company’s own operating capital. It will also employ a range of security measures that can assist clients in safeguarding their account information. All these protections, along with knowledge of the market and a sound risk management plan, should reduce the risk traders are exposed to.
Do Indian Brokers Provide Negative Balance Protection?
Applying effective risk management in forex trading is of essential importance to protect your capital from excessive losses. Negative balance protection is among the tools that may help traders mitigate or lower the risk exposure.
Offshore forex brokers accepting traders from India facilitate trading in the global financial market and are often regulated by stringent supervisory authorities. Thus, these brokers tend to comply with the international standards for Forex trading and the requirements outlined by their respective watchdogs. This includes offering investor protection mechanisms such as negative balance protection, which is usually available to holders of retail accounts.
As its name suggests, the mechanism ensures that traders do not lose more money than they have deposited into their trading accounts. In other words, the safeguard protects one from incurring debts to brokers due to poor investment decisions or unfavorable market conditions.
During a volatile environment where a leveraged position could lead to a negative balance, traders’ losses will instead be reduced to the initial account balance, thanks to the aforementioned protection tool. Users are also advised to stay tuned to market conditions and make sure their trading accounts are properly funded.
As mentioned previously, most brokers provide negative balance protection only to their retail clients. Professionals are typically excluded, as it is presumed that they are better equipped to handle the risks associated with forex trading.
Do You Pay Tax on Forex Trading in India?
Under Indian laws, investments in any instruments, including forex trading, are subject to taxes. Indian traders are banned from trading directly in the forex market. Under the Foreign Exchange Management Act (FEMA), they can instead partake in forex trading through SEBI-recognized entities or stock exchanges. However, traders are subjected to particular limitations, such as the mandatory inclusion of the Indian Rupee as a base currency in a traded pair.
GST (Goods and Services Tax) is levied on profits from forex trading. The GST amount ranges from 5% to 18%, depending on traders’ income. However, do note that taxation laws are subject to change. We thus encourage you to consult with a local tax professional in order to stay up to date with the latest requirements.
How Does the Available Leverage of SEBI-Regulated Brokers Compare to the Leverage at Brokers Regulated Offshore?
Leverage enables traders to control larger market positions by utilizing borrowed funds from brokers. However, it is important to note that although leverage amplifies traders’ buying power, providing opportunities for sizable profits, it also magnifies the risk they are being exposed to. Leverage is expressed in a ratio signifying how much traders control for 1 unit of their trading account.
The maximum allowable leverage in India for major currency pairs, including USD, EUR, JPY, and GBP, is 1:50. The leverage for other minor currency pairs is capped at 1:20. These leverage limits are enforced in order to protect traders from exposing themselves to excessive risk.
For comparison, brokers catering to traders from EU countries need to abide by leverage limitations of 1:30 for major currency pairs and 1:20 for minor currency pairs. Meanwhile, there are regulators that either do not impose leverage caps or permit brokers to offer far higher leverage of up to 1:200 or even 1:500. The Financial Services Authority of Seychelles (FSA) is one such supervisory body.
Traders should be careful with the level of leverage they are willing to trade with. Lower leverage like 1:5 or 1:10 is more suitable for inexperienced and risk-averse traders.
What Do You Need to be Designated as a Professional Trader in India?
Experienced traders who hold accounts with a Forex broker may want to upgrade their trading experience and see if they are eligible for professional trading accounts. International Forex trading brokers state that at least two of the following criteria must be met for an individual to be eligible for a professional account.
The first condition is related to users’ trading activity in the last 12 months. Candidates must have carried transactions of significant size, at an average frequency of 10 per quarter. To prove their trading activity, clients must provide their brokers with account statements.
Another potential factor has to do with the user’s employment. Specifically, at least one year of professional experience in the financial sector is among the requirements.
Last but not least, a substantial portfolio, including cash savings and financial instruments, is most commonly stated as a third requirement by international forex brokers. At brokers with licenses from European regulators, the minimum amount is €500,000.
What Trading Platforms Are Available to Indian Traders?
Indian traders can choose between a variety of trading platforms at Forex trading brokers. It is, therefore, crucial to select software that will best suit your preferences.
Developed by MetaQuotes in 2005, MetaTrader4 is among the most popular trading platforms in the online trading sphere. Although it is most commonly associated with forex, the platform can be used for a range of other markets, such as commodities and indices. MT4 is very popular due to its highly customizable interface, which allows it to cater to the preferences of various traders. Additionally, the platform enables traders to automate their trading and close positions as per pre-set parameters.
MetaTrader5 has been designed to accommodate advanced trading needs across a wider assortment of financial instruments than its predecessor. Yet, the similar interface allows for a smooth transition from the MT4 platform. Some of the key features that make MT5 especially appealing to experienced and novice traders alike are the regular news regarding financial markets, the free trading community chat function, and the seamless mobile compatibility enabling investors to trade anywhere, anytime.
CTrader is yet another popular forex and CFD trading platform developed by Spotware Systems Ltd. and introduced in 2010. It has been specifically designed with high speed of execution in mind and offers advanced trading features, an intuitive interface, and plenty of customization options. The platform is also renowned for its copy trading feature and trade analysis tool.If you wish to contact resources that can provide you with additional information on how the Indian forex market is regulated, our team has compiled the following links, which will be of use to India-based traders.
- The Securities and Exchange Board of India (SEBI): This is the official regulatory body responsible for monitoring the financial market in India, including retail brokers authorized to offer forex trading to Indian traders.
- The Central Bank of India (RBI): Financial service providers, such as forex brokers, are also regulated by the Central Bank of India, which is restricting the provision of forex services carried out by unregulated brokers. You can also check a comprehensive list of full fledged money changers on RBI’s official website.