Is this way of forex trading legal?

Any deposit for margin trading outside India is illegal. Only way go through Nri route if you have relative or friend or any trustworthy their. some news like they are permitting eurousd, and 2-3 other pairs in total 4 pairs in India but use less for carryforward as huge risk involved and risk of gap up and gap down because trading hours is restricted. They again trying to fool investor. They take reverse trade and hedge like market maker. Thats Y I dont like Indian market. As per me fully baised. If you are good in trading then try to shift in international through legal route. They will enjoy everything not let us earn.
Besides the infamous NRI funding technique, don't forget these are legal ways of trading forex too (and would also help Indian retail traders to avoid using RBI's limited forex khazana)

1) Using REAL dollars earned in the online business (art/Music selling, website ad revenue, youtube AdSense earning or any other 101% legal non forex businesses)to fund your international forex trading account. Then make as much profits as you want on your own hard earned money. Then bring profits finally to India via any method of withdrawal as provided by your international broker. File tax under challan 280 and mention capital gains or your other 101% legit online business as the income source

2) If Forex trading is the only online business that you do, then always use an intermediary online payment processor between your local Indian bank and international forex broker for deposits and withdrawals like webmoney and skrill. At the time of filing tax return however, you have to take a risk of telling lie about the source of income. But since your bank or RBI will not have any records to prove for what purpose you deposited money in webmoney, you can safely lie here and just mention capital gains

Lastly, in case you are unfortunate enough to not have any NRI friend/relative or any online business located outside India that pay you in dollars, then you just can't deposit directly from your Indian local bank for international forex margin trading. You'll then be penalized as per RBI regulations and FEMA act.

Hope this helps to clear up the mist a bit more

Happy international currency trading my dear fellow Indians!:thumb:
Btw, note that RBI states that resident Indians cannot use Indian money to fund their international forex margin trading account. That will be illegal.

However, it never stated that it is illegal to trade forex involving currency pairs other than with INR. In fact recent RBI ruling allows trading international forex pairs with Indian brokers like EUR/USD. So, just to sum it up, THERE IS NO WAY THAT FOREX PAIRA TRADING WITH INTERNATIONAL BROKERS CAN BE ILLEGAL... unless and until Indian money is used to fund those...

Yeah Hii there,
Indian Exchanges (NSE, BSE, MCX-SX) offering forex instruments allow you to trade freely. Currently, you can only trade in currency pairs involving INR and there are 4 such pairs. These are USD/INR, EUR/INR, GBP/INR and JPY/INR. Trading on other pairs is illegal under Foreign Exchange Management Act (FEMA) which restricts you from forex trading in domestic as well as international markets and doing so is considered Non-Bailable Offence.
Does this mean Indian traders cannot trade all the different currency pairs available except ones with INR pair ?:confused:
I know depositing funds via credit cards, bank online Forex brokerages that allows EUR/USD sort of pairs is illegal.It violates the FEMA act and disturbs foreign exchange balance.
My question is,
Would it be illegal if I trade currency pairs NOT involving INR, with using Skrill or Bitcoins as my deposit method. BTW i earned the Bitcoins and Skrill from internet freelancing and doesn't involve INR at all.
Thanks in advance
This should be perfectly legal , there is no restriction on spending the foreign currency earned via any services . btw, did you go ahead with this or not
Yeah I'm from India and I trade with Hotforex without any problems I even don't need to pay taxes because I use online payment systems to withdraw profit

wanted to understand how can you not pay taxes as whatever you withdraw is to a bank or a credit/debit card . So there is no way we can hide that income

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