What You Need to Know in Order to Start Trading in India
Trading is one of the best ways of making money in India. Many successful cases of traders who have used forex to enrich themselves are many in India. So, how do you get started as a trader in India? This is an important question that every trader must seek proper answer before engaging in trading.
Here, we’ll look at the basics that a trader needs to know before they can start trading in India.
Is trading legal in India?
Amongst the preliminaries is looking at the legality of trading forex in India. Fortunately, forex trading in India is legal, thus you can do it freely. However, you will need to do it within the constraints of the law as stipulated in the Forex Exchange Management Act (FEMA) of 1999.
Trading brokers
You can only trade legally through any of the dealers listed in the Securities and Exchange Board of India (SEBI). Therefore, the trading partner needs to be a legal entity certified by SEBI.
Depositing and withdrawing money for trading in India
Once you have identified a trading company that is registered by the authorities, you will need to open an account with the broker. You will definitely need an MT4 for PC download to start your trading activities. MT4 is a preferred trading platform because of its ease of use.
Depositing money is quite easy in India. You can use the RTGS facility or pay by margin cheque to your broker. You can also use a payment gateway such as a debit/credit card to transfer money from your bank account to your trading account.
Withdrawing money is also simple. You have the same options for receiving your money from your trading account. Depending on the trading broker, the fees might vary in India. You need to supply your bank details to your broker to get your money deposited into your account.
Accepted trading currencies in India
Before you start trading in India, you need to know that 7 currency pairs are allowed for trading in the country. Luckily, the seven pairs consist of the top global trading currency pairs. They are:
- USD/INR (US Dollar – Indian Rupee
- GBP/INR (Sterling Pound – Indian Rupee)
- EUR/INR (Euro – Indian Rupee)
- JPY/INR (Japanese Yen – Indian Rupee)
- EUR/USD (Euro – US Dollar)
- GBP/USD (Sterling Pound – US Dollar)
- USD/JPY (US Dollar – Japanese Yen)
These are the only allowed currency pairs that can be traded in India’s National Stock Exchanges.
Are international brokers allowed in India?
The rules and regulations set by SEBI in conjunction with the Reserve Bank of India prohibit dealing with international brokers outside India’s jurisdiction. This is because they are not governed by SEBI, hence an Indian is not allowed to trade with them. Such trades are termed illegal.
Final say:
Once you understand the legality of forex trading in India, you can begin your trading activities. Remember, the government bodies including SEBI and the Reserve Bank of India are responsible for controlling forex trading activities and you can reach them if you have a question.
