With nearly 1.4 billion inhabitants and with Covid restricting the local economy and causing individuals to look for other sources of income, it is no wonder that foreign exchange trading in India has increased significantly in popularity. Current estimates, as reported by forex brokers, are that roughly 1.2m new accounts were opened during the first year of the Covid global pandemic. Daily turnover is now estimated to be $40 billion.

The Republic of India has started to recover to pre-Covid levels, with inflation expected to ease. India had a GDP of $3.73tn in 2023 with a GDP per capita of $2601 and an annual growth rate of 7.2%. With growth expected to reach 6.2% in 2024, India remains the fastest growing large economy in the world.

Local regulators in India, however, have yet to embrace the enthusiasm of the local populace for trading currency pairs with online broker platforms. These entities have instituted restrictive regulations that, in essence, forbid the type of forex trading enjoyed by the rest of the world. Even under the restrictions, forex trading in India is considered legal and an excellent way to hedge against the declining Rupee (INR) value, which has depreciated versus the USD by nearly 15% since 2019.

Are you interested in trading forex in India? This article will explain the legalities of trading currency pairs in India, how the activity is regulated, and how to start trading. Lastly, read on if you need assistance finding a reputable forex broker. We have prepared a list of the best forex brokers in India for your review, where we continually review the brokerage community to make these assessments.

Is it Legal to Trade Forex in India?

In 1999, the Foreign Exchange Management Act (FEMA) became a basis for regulating active dealers in the foreign exchange market. The act may have been intended to curb capital flows with money changers that could impact the value of the Rupee, but it also placed heavy restrictions on how forex and currency transactions are handled.

It is, therefore, legal to trade forex in India, but the rules are complicated and subject to change. The issue is that actual forex trading on an electronic platform is relatively new to India. Unfortunately, wherever forex trading has become popular, scam and con artists will soon follow and dupe unsuspecting consumers.

Regulators have reacted severely to recent incidents involving fraud and shady business practices. Trading forex with spot transactions has been the primary focus. Several approved local stock exchanges, such as the National Stock Exchange of India Ltd. (NSE) and the Metropolitan Stock Exchange of India Ltd (MSE), enable the trading of listed futures and options.

Forex Regulation in India

The actions taken by regulators in India are designed to help you avoid forex-related scams. The primary regulator is the Securities and Exchange Board of India (SEBI), which works in concert with the Reserve Bank of India (RBI). To combat fraud and scams, these regulators recently issued alerts containing the names of a broad brush of the brokerage community.

There is a register on the SEBI website that can verify which brokers have the regulators’ blessings. Global regulators have a difficult task in curbing offshore fraud in the forex industry. The central bank in India has an ‘alert list’ available of unauthorised entities to help protect traders. Check for local guidance before proceeding.

How to Start Forex Trading in India

Since the regulations in India are complicated for trading in foreign exchange, you might want to seek advice on the best way to proceed with your local circumstances. The recommended pathway for starting the process can be described in five simple steps:

  1. Preparation: Develop your knowledge of forex trading by doing your research. Read some of the articles on this website or attend tutorials on a prospective broker’s website. You need to know the terms used and understand how to use charts, indicators, risk management techniques, order execution modules, and, most importantly, how to select a safe and secure broker.
  2. Select a broker: Our list of recommended brokers below is an excellent starting point. Access the free demo system to familiarise yourself with the trading platforms. Refer to the list of prohibited traders mentioned above. Select a heavily regulated broker, and consider the fees and security features while following local guidance related to regulations that are in place.
  3. Open an account: Follow your selected broker’s instructions and send funds to your trading account via the most cost-effective means.
  4. Practice and review your trading strategies: Once again, the demo system will help you gain confidence and help you refine this strategy.
  5. Initiate trading: It is best to start slowly with small funding amounts.

The Best Forex Brokers in India

Finding a reliable forex broker, especially when your best option is to search offshore for your prospective business partner, is often a daunting task. Cross-border fraud in the forex brokerage industry is still a significant problem, and you would be advised to limit your consideration to regulated brokers.

Broker Features Regulator Platforms Next Step
Number One Broker Forex.com logo74% of clients lose money. Capital at risk. Founded: 1999

- Trusted Global Market Leader
- Online FX & CFD Trading
- 180+  Global Markets, 84 FX pairs, 65 shares, 17 popular indices and more
- Forex, Indices, Commodities, Equities & Bitcoin
- Available to US traders

CFTC, CIMA, FCA, FSA, IIRO, NFA FOREXTrader & MT4 for PC, MAC, iPhone, iPad and Android, WebTrader
Oanda Logo77% of retail CFD accounts lose money Founded: 1996
Your capital is...
  • Choose from four high-quality platforms.
  • Good trading conditions with fast execution speeds
  • Excellent research and analysis
  • Strong client protection
  • Winner of Most Popular Broker award for three consecutive years.
  • Fees and commissions are inline rather than market-leading.
  • Satisfactory rather than impressive range of instruments.
eToro LogoYour capital is at risk Founded: 2019

- Trade 15 cryptocurrencies
- Beginner friendly

- eToro


    Forex trading in India is legal, but it has challenges. The local regulators intend to protect Indian consumers from unscrupulous business practices and fraud, and due to these concerns, they have instituted restrictive policies. To start trading, your first task is to select a safe and secure forex broker. Each of the brokers presented above is an excellent step to help you with your forex journey. Evaluate your needs, practice on the broker’s free demo system, and start your forex trading adventure.