Understanding Forex Trading Regulations in India
Before diving into Exness’s validity, it’s essential to understand the regulatory environment governing forex trading in India. The Indian financial market operates under strict oversight by two primary authorities:
1. Reserve Bank of India (RBI): The RBI regulates foreign exchange transactions under the Foreign Exchange Management Act (FEMA), 1999. According to FEMA, Indian residents are restricted to trading currency pairs involving the Indian Rupee (INR), such as USD/INR, EUR/INR, GBP/INR, and JPY/INR. Trading foreign-to-foreign currency pairs (e.g., EUR/USD) is prohibited unless conducted through recognized Indian exchanges like the National Stock Exchange (NSE) or Bombay Stock Exchange (BSE).
2. Securities and Exchange Board of India (SEBI): SEBI oversees India’s securities and financial markets, ensuring transparency, fairness, and compliance. SEBI mandates that brokers operating in India must be registered and adhere to strict guidelines, including Know Your Customer (KYC) and Anti-Money Laundering (AML) policies.
Additionally, profits from forex trading are taxable under the Income Tax Act, and traders must declare their earnings to remain compliant with Indian tax laws.
