Read and digest if you understand English. Forex trading is allowed......
II. Liberalised Remittance Scheme of USD 50,000.
31. What is the Liberalised Remittance Scheme of USD 50,000?
This is a facility extended to all resident individuals under which, they may freely remit upto USD 50,000 per fianancial year for any permissible current or capital account transaction or a combination of both.
32. Who is eligible to avail of this Liberalised Remittance Facility?
The facility is available to resident individuals only.
33. Is there any frequency for the remittance?
There is no restriction on the frequency. However, the total amount of foreign exchange purchased from or remitted through, all sources in India during the current financial year should be within the limit of USD 50,000/-.
34. What are the purpose/s for which remittance can be made under the Scheme?
This facility is available for making remittance/s for any permissible current or capital account transaction or a combination of both. It is not available for purposes specifically prohibited (Schedule I) or regulated by the Government of India (Schedule II) of Foreign Exchange Management (Current Account Transactions) Rules, 2000.
35. Can residents avail of this facility for acquiring immovable property and other assets abroad?
Yes. Individuals are free to use this Scheme to acquire and hold immovable property, shares or any other asset outside India without prior approval of Reserve Bank.
36. Can individuals open foreign currency account abroad for making remittance under the Scheme?
Yes. Individuals are free to open, hold and maintain foreign currency accounts with a bank outside India for making remittances under the Scheme without the prior approval of Reserve Bank. The account can be used for putting through any transaction connected with or arising from remittances under the Scheme.
This is a cut and paste from: http://www.rbi.org.in/scripts/FAQView.aspx?Id=53
II. Liberalised Remittance Scheme of USD 50,000.
31. What is the Liberalised Remittance Scheme of USD 50,000?
This is a facility extended to all resident individuals under which, they may freely remit upto USD 50,000 per fianancial year for any permissible current or capital account transaction or a combination of both.
32. Who is eligible to avail of this Liberalised Remittance Facility?
The facility is available to resident individuals only.
33. Is there any frequency for the remittance?
There is no restriction on the frequency. However, the total amount of foreign exchange purchased from or remitted through, all sources in India during the current financial year should be within the limit of USD 50,000/-.
34. What are the purpose/s for which remittance can be made under the Scheme?
This facility is available for making remittance/s for any permissible current or capital account transaction or a combination of both. It is not available for purposes specifically prohibited (Schedule I) or regulated by the Government of India (Schedule II) of Foreign Exchange Management (Current Account Transactions) Rules, 2000.
35. Can residents avail of this facility for acquiring immovable property and other assets abroad?
Yes. Individuals are free to use this Scheme to acquire and hold immovable property, shares or any other asset outside India without prior approval of Reserve Bank.
36. Can individuals open foreign currency account abroad for making remittance under the Scheme?
Yes. Individuals are free to open, hold and maintain foreign currency accounts with a bank outside India for making remittances under the Scheme without the prior approval of Reserve Bank. The account can be used for putting through any transaction connected with or arising from remittances under the Scheme.
This is a cut and paste from: http://www.rbi.org.in/scripts/FAQView.aspx?Id=53
However I do hope RBI allows Forex trading on margin by Indian citizens ASAP as I am also interested in forex trading but I won't do it in a big way until RBI allows it legally.