Traditionally the Indian FX market has been a highly regulated one. The government exercised absolute control on the exchange rate, export-import policy, FDI ( Foreign Direct Investment) policy till about 1992-93. The exchange rate in India under the current regime is by and large market-determined. Even while intervening, RBI takes care that through its operations, the basic market forces are not out of place. The market players, while always keeping an eye on what could be the possible move by RBI, broadly agree that the exchange rate moves based on the demand and supply forces.
There many Indian citizens who are aware of the foreign exchange market(FX) and want to participate in it to earn profits. For citizens based in the country, not much awareness exists regarding FX brokers available to them. But because of some legal complexities, getting access to FX trading from India is not so straightforward.
A list of the top FX Brokers available to Indian FX traders
Many Indian FX traders aren’t aware of how to access FX trading in India. This is largely due to the legal complexities involved, which make it difficult for any online broker to operate in the country. This is one of the reasons why several international online FX brokers have started to make local deposit methods available to favour India-based traders.
With that being said, the following is a list of forex brokers in India with local bank deposit options which makes it easier for Indian citizens to access FX trading.
5 Best FX brokers in India
1. FBS
FBS is an online trading platform that allows Indian citizens to access social trading as well as copy trading services. The broker does not provide any INR based currency pairs to trade, although the other markets have very low spreads starting from 0 pips.
Features:
- FBS provides 6 account options for its users to choose from, including an ECN trading account, a copy-trading account as well as a cent account for micro trading.
- The minimum deposit amount for Indian citizens trading outside of Europe is $1 while it’s $10 for those based within Europe.
- Several account funding options are available via eWallets, wire transfers and credit cards with no fees attached. INR deposits are not available, however.
2. AvaTrade
AvaTrade is a highly regulated FX broker known for its extensive collection of tradable instruments. Founded in 2006, the broker offers platforms like DupliTrade and ZuluTrade for social copy trading, as well as its proprietary platform WebTrader.
Features:
- Indian citizens can access any one of the 4 account types available: retail, standard, spread betting and options. All of these accounts have a minimum deposit requirement of $100.
- Spreads on the platform start from as low as 0 pips.
- Deposit methods include wire transfers, major credit cards and eWallets.
- Although it does not accept INR deposits, users can use USD, EUR, AUD and GBP as their base currencies.
3. Pepperstone
Established back in 2010 and headquartered in Australia, Dubai and the U.K, Pepperstone is a renowned ECN FX broker that adheres to major financial regulatory directives.
Features:
- Spreads start from 0 pips even though INR-based currency pairs are not available.
- The broker offers two types of swap-free FX trading accounts, both of which have a minimum deposit of $200.
- The broker accepts deposits via eWallets, credit cards and wire transfers with no attached fees.
Visit Pepperstone to know more.
4. FXTM
FXTM is another top FX broker that does not provide any INR-based currency pairs but provides favourable conditions for Indian FX traders to join. With over 2 million users, it operates across 150 countries and is available in 18 different languages.
Features:
- There are 6 different account options to choose from including 3 ECN style accounts: the ECN account, cent account and FXTM shares account.
- The minimum deposit requirement for the cent account is $10. The ECN account has a minimum deposit of $200. The FXTM shares account has a minimum deposit amount of $10,000
- Indian traders can deposit via Neteller with no fees. However, a conversion fee is applicable since the broker does not accept INR as a base currency.
5. eToro
eToro is one of the best known online brokers when it comes to social or copy trading. The platform doesn’t feature direct INR trading, although it provides a wide range of currency pair options. Spreads on the pairs start from 1 pip, although the average spread may be on the higher side. It has only one account type available.
Features:
- The broker charges a small conversion fee as the only base currency on the platform is USD.
- You can deposit funds using credit cards, eWallets and wire transfers.
- The minimum deposit for Indian traders is $200.
Is FX trading legal in India?
Indian citizens can conduct FX trading in India, contrary to what many believe. However, it becomes complex because of the legal status of FX trading in the country.
- The Securities and Exchange Board of India(SEBI) is the main regulatory body for FX trading in the country.
- The Reserve Bank of India(RBI) has made trading with certain currencies illegal under the pretext that the Indian currency will get devalued.
- Indian FX traders can only access currency pairs that feature the INR along with other major currencies such as JPY, GBP, EUR and USD.
- The Indian government has recently allowed the introduction of 3 major currency pairs: USD/JPY, GBP/USD and EUR/USD.
- Indian FX traders can only access FX trading platforms that are regulated by the SEBI. An Indian citizen based abroad does not fall under these regulations.
- The SEBI does offer protection to the deposits of a forex broker, which results in brokers under them not maintaining segregated accounts to hold client deposits.
- SEBI does not enforce any leverage limitations on its brokers. It also does not provide any negative balance protection to traders under its regulated brokers.
It is a well-known fact that the forex market in India is moderated by RBI’s intervention from time to time whenever it deems it required. Intervention by Central Banks in foreign exchange markets is nothing new. Central banks intervene in the forex market in line with their policy to moderate the exchange rate whenever it wanders away from a comfortable level objective. The stated objective in the Indian case is to reduce the volatility in the forex market.
How to deposit money when trading forex in India
FX trading in India is a grey area as there is much confusion over how people deposit their funds. Normally you will have to choose a broker which is regulated under the SEBI. However, accessing certain international online brokers is possible. The rules state that one cannot send money outside of India to partake in FX trading. But there are no limitations if you trade without sending money outside the country.
- Deposits in INR are not allowed through the traditional, RBI or SEBI regulated deposit methods when it comes to FX trading. However, international brokers bypass this by allowing their Indian clients to use local deposit methods to send funds to the brokers.
- Indian traders can choose a broker which is regulated by any international regulatory authority such as the ASIC or FCA. They can deposit using methods such as bank transfer or eWallets which is completely legal.
- However, if Indian traders want to be certain that they are trading in a legal and protected way, they should not venture beyond brokers regulated under SEBI. However, you can safely choose one of the brokers from our list after being aware of all the rules and regulations regarding foreign exchange trading.
Traders based in India should always read the terms and conditions and be aware of all SEBI and RBI guidelines before embarking on forex trading with an online broker.