Forex trading is allowed with respect to INR and cannot be based on EUR-USD.Following is from the rbi site
Liberalised
Remittance Scheme
(updated up to September 17, 2010)
The Reserve Bank of India had announced a Liberalised Remittance Scheme (the Scheme) in February 2004 as a step towards further simplification and liberalization of the foreign exchange facilities available to resident individuals. As per the Scheme, resident individuals may remit up to USD 200,000 per financial year for any permitted capital and current account transactions or a combination of both. The Scheme was operationalised vide A.P. (DIR Series) Circular No. 64 dated February 4, 2004.
PART A :
Q.1. What is the Liberalised Remittance Scheme of USD 200,000?
Ans. Under the Liberalised Remittance Scheme, all resident individuals, including minors, are allowed to freely remit up to USD 200,000 per financial year (April – March) for any permissible current or capital account transaction or a combination of both.
Q.2. Please provide an illustrative list of capital account transactions permitted under the scheme.
Ans.. Under the Scheme, resident individuals can acquire and hold immovable property or shares or debt instruments or any other assets outside India, without prior approval of the Reserve Bank. Individuals can also open, maintain and hold foreign currency accounts with banks outside India for carrying out transactions permitted under the Scheme.
Q. 3. What are the prohibited items under the Scheme?
Ans. The remittance facility under the Scheme is not available for the following:
i) Remittance for any purpose specifically prohibited under Schedule-I (like purchase of lottery tickets/sweep stakes, proscribed magazines, etc.) or any item restricted under Schedule II of Foreign Exchange Management (Current Account Transactions) Rules, 2000;
ii) Remittance from India for margins or margin calls to overseas exchanges / overseas counterparty;
iii) Remittances for purchase of FCCBs issued by Indian companies in the overseas secondary market;
iv) Remittance for trading in foreign exchange abroad;
v) Remittance by a resident individual for setting up a company abroad;
vi) Remittances directly or indirectly to Bhutan, Nepal, Mauritius and Pakistan;
vii) Remittances directly or indirectly to countries identified by the Financial Action Task Force (FATF) as “non co-operative countries and territories”, from time to time; and
viii) Remittances directly or indirectly to those individuals and entities identified as posing significant risk of committing acts of terrorism as advised separately by the Reserve Bank to the banks.
If someone says to deposit in INR and then you are allowed to trade in EUR_USD then he is giving
loan in USD and that is external commercial borrowing(ECB) and hence regulations of RBI apply.
More over indian residents are not allowed to trade in instruments that have leverage.
Only possibility is to invest in stocks and also margin funding on the investment is not allowed since that becomes ECB.
Unless and until someone is extremely confident that he will give the taxman a slip time and again, it is not possible to trade non INR
currency pairs till the SEP 2010 notification is repealed.
CAclubindia
