So you are a forex trader, or a new trading looking to break into the forex trading world in India? You have likely considered the global and Indian forex market very carefully.
When thinking about which of the top forex brokers offer to take up on opening an account, you may or may not have considered brokers in India, or at least those that are available for Indian citizens. If that is the case, then you find yourself in the perfect place.
Here we have taken at the foreign exchange market for Indian citizens and compiled a listing of the best forex brokers in India just for you.
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Is Forex Trading Illegal in India?
For Indian citizens, this is the key question when getting involved in forex trading. The simple answer here is no. This however comes with some complexities for Indian forex traders that we will explain.
Forex trading in India is regulated by SEBI (Securities and Exchange Board of India) similarly to the way in which foreign exchange and trading is regulated in other countries. The difference comes though with the fact that the RBI (Reserve Bank of India) has made trading with some other currencies and the Indian Rupee illegal for fear of devaluing the Indian currency.
With that in mind then, the only forex trading acceptable for Indian forex traders to participate in is that of INR based pairs with major currency the USD, EUR, GBP, and JPY. The Indian government have recently relaxed the rules to allow the introduction of trading on other major foreign currency pairs such as EUR/USD, GBP/USD, and USD/JPY. Other pairs are currently not available.
When it comes to online forex brokers and the Indian forex market, it is however illegal for Indian forex traders to use any online forex trading platform that is not regulated by SEBI. If you are reading this review as an Indian citizen based abroad, then you typically have more freedom from these regulations and you can follow the regulations of your local area.
Disclaimer: The following top 10 illustrates international forex brokers that offer forex trading services in India. However, we couldn’t find any information regarding their SEBI compliances (except from Alpari). If you’re based in India, and you want to open an account with them, contact local experts before taking any further action.
Top 10 of the best Forex Brokers in India today
Here’s our Top 10:
Taking a closer look at the way that the Securities and Exchange Board of India (SEBI) operates we noticed many things from an Indian traders perspective.
Among these is the fact that the body do not protect the deposits of a forex trader in the same manner as is allowed by other top regulatory bodies. This means they do not push the brokers to hold deposits in segregated accounts or through ICF. This is a major reason why some Indian forex traders criticize the organization for not doing enough to protect Indian traders.
SEBI are also flexible in the rules they set which provides this level of flexibility to be extended to the broker. We can see this in the provision of leverage for forex trading, with no limitations being enforced, however a 200:1 maximum leverage is typical.
Leverage can be risky and lead to losing your money in some cases. While ESMA and other well regulated forex brokers do provide negative balance protection, SEBI does not. This could lead to losing your money more than you have actually deposited, so you should be careful to manage this.
How to protect yourself from being scammed
This is something that of course we never want to happen, but we do always have to guard ourselves as forex traders against being scammed.
When it comes to Indian citizens and forex traders, these kind of scams have been previously reported from the broker AVFX with many forex traders claiming to have been victims of a scam forex broker.
Being a well-regulated forex broker means more often than not, being regulated by a well-recognized regulatory body such as FCA, NSA, ASIC, and CySEC. Well-regulated forex brokers under these conditions tend to also be ESMA/MiFID compliant.
With this, we would recommend against making deposits and dealing with unregulated forex brokers or those under offshore regulation for maximum protection as a forex trader. Finally, as an Indian trader and Indian citizen interested in forex trading, if you want to be certain that you are trading in a legal and protected manner, you should choose a SEBI regulated broker or if this is not the case, you should try to consult with the local authorities before making any deposit or trades.
Some of these measures, as well as taking care to choose the best Indian forex broker from our listing can make sure that you remain both compliant and well-protected as a trader in the forex market.