Forex Trading India
FOREX TRADING IN INDIA
Forex trading has a lot of risk involved to it, even though it is very exciting and has a good profit in the market. Before starting the trading in the Forex market, it is very important to understand the pitfalls and the opportunities offered by the Forex Market and what does the margin trading implies.
In India, the policies for foreign currency exchange are very strict, even after the liberalization and it is still isolated and a highly protected nation in terms of economy. Indian Currency i.e. Rupee is still controlled by the Reserve Bank of India which is the National Banking Authority.
Therefore, the citizens are unable to trade freely Rupee into other currencies. Indian citizens are still required to provide a valid reason and submit their annual limits to carry out the trade in the Forex Market. Even the most common and famous money transfer methods like the Western Union Money Transfer which is available worldwide is not available in India.
Here the Indian Citizens can just receive money sent to them by their friend or relatives, however they are forbidden to send money. Not only this, even the receiving procedure is very difficult, as the person has to submit a Photo Identity Proof before receiving the money.
However, as per the Globalization of the Nations, the Reserve Bank of India is trying to soften the laws and the policies in the past few years. Recently in the year 2008, the RBI has finally permitted the currency futures trading in India and this came up as one of the most important changes in regards to Forex trading in India. Even the speculative trading was permitted by the Reserve Bank of India as it was difficult to ask for a proof every time showing the hedging needs.
Even after the amendments in the policies, the traders are only permitted to trade in USD/INR pair at this time. As Indian Rupee (INR) is not as volatile as compared to other currencies and it becomes difficult to conduct the analysis and the movements is dependent on the Reserve Bank Of India’s decision rather than the market events.
Therefore, in conclusion all we can say is that Indian economy needs to rise marginally as it still lacks behind in the market in the era of Globalization and Liberalization. Indian Citizens should make an effort to explain the Indian Government to take steps in this regard and make the economy prosperous in the Forex Market.