Is forex trading legal in India?

What is allowed

Under the Foreign Exchange Management Act, 1999 (FEMA) and RBI rules, residents can trade exchange-traded currency derivatives on recognised Indian stock exchanges (such as NSE and BSE) through brokers registered with SEBI. These include rupee pairs (USD/INR, EUR/INR, GBP/INR, JPY/INR) and a few cross-currency pairs (EUR/USD, GBP/USD, USD/JPY). RBI rules on these products expect positions to relate to a genuine currency exposure; your broker can explain what applies to you.

What is not allowed

• Offshore forex and CFD platforms: sending money abroad to trade leveraged forex, gold, oil or index CFDs on margin is not a permitted purpose under the Liberalised Remittance Scheme, and trading on unauthorised platforms can attract penalties under FEMA.
• Unauthorised "forex apps" advertised on social media: the RBI maintains an Alert List of entities that are neither authorised to deal in forex nor to run electronic trading platforms for it. The list is not exhaustive; an app not being on it does not make it legal.
• Paying an offshore broker by card, UPI or through a local agent doesn't change this.

Where gold fits

Spot gold CFDs (XAUUSD) from offshore brokers fall under the same restriction. In India, gold can be traded through exchange-traded products and futures on Indian exchanges, which have their own rules and timings. Ten12 Mentors does not cover Indian exchange-traded products.

Crypto and USDT contracts

Crypto is not banned in India. Since 2023, crypto exchanges and other virtual digital asset service providers that serve Indian users must register with the Financial Intelligence Unit (FIU-IND) under the anti-money-laundering law; several offshore exchanges were blocked for not doing so, and some, such as Binance, registered in 2024. Registration is about anti-money-laundering compliance; it is not approval of every product an exchange offers.

Tax: since April 2022, gains on virtual digital assets are taxed at a flat 30% (plus cess), losses cannot be set off against other income, and since July 2022 1% TDS applies to many transfers. Crypto derivatives such as USDT-settled perpetual contracts are a developing area for both regulation and tax treatment; get professional advice.

A quick checklist before you trade anything

1. Is the platform regulated or registered in India for what it offers? Check SEBI, RBI or FIU-IND registers yourself.
2. Is the platform on the RBI Alert List? Search the list on rbi.org.in.
3. Do you understand the tax treatment and the record-keeping you'll need?
4. Have you sized the trade so a loss is affordable? Use a position size calculator and a daily loss limit.

How Ten12 Mentors approaches this

We are an education platform. Our software and courses use international charts such as XAUUSD and BTCUSD because that is where the liquidity and the clean price history are, and our paper trading simulator uses virtual money only. We don't tell anyone where or whether to trade, and we encourage every member to use only products that are legal for them.

Official sources: Reserve Bank of India (Alert List, FEMA), SEBI, FIU-IND, Income Tax Department.