Forex Information

Trading in FOREX is not easy beacuse of certain reasons. Below I will give you certain information that will help you in this area:

• Foreign Exchange Management Act: The Foreign Exchange Management Act (1999) or in short FEMA has been introduced as a replacement for earlier Foreign Exchange Regulation Act (FERA). FEMA came into act on the 1st day of June, 2000. The main objective behind the Foreign Exchange Management Act (1999) is to consolidate and amend the law relating to foreign exchange with objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India. FEMA is applicable to the all parts of India. The act is also applicable to all branches, offices and agencies outside India owned or controlled by a person who is resident of India.

• Basic Travel Quota: A person can purchase foreign exchange for travel abroad against payment in cash if the rupee equivalent payable by him does not exceed Rs. 50,000. If the rupee value of foreign exchange exceeds Rs. 50,000, the entire payment should be made by way of a crossed cheque drawn on applicant's bank account or the bank account of the firm/company sponsoring the visit. Payment in such cases can also be made in the form of a banker's cheque/pay order/demand draft.

• Business Visits: The sponsoring firm/company/organization (the applicant in cases of self-employed professionals) should make an application for the release of exchange to an authorized dealer or an authorized full-fledged money-changer by a letter, in duplicate, indicating the name, address, nationality, passport number, duration, nature of visit to each country, foreign exchange required and a certificate from the employer stating that the expenses are being borne by them. Exchange up to U.S. $ 25,000 can be released by authorized dealers regardless of the duration of the visit.

• Entertainment Allowance: Chief Executives of Export / Trading / Star Trading Houses -not exceeding US $ 5000 per trip. Officials of other firms / companies etc. - not exceeding US $ 2000. Travelers proceeding to Islamic Republic of Iran, Russian Federation and other with Foreign Currency Notes and coins up to their full entitlement; if the traveler so desires similarly exchange up to two weeks can be drawn in the form of Foreign Currency Notes and Coins. Sponsored by Trade Bodies such as Chamber of Commerce.

• Business Visits against Foreign Hospitality: Up to US $ 500 if the visit is for a period not exceeding 10 days. If the period of visit exceeds 10 days, US $ 50 per day up to a maximum period of 45 days.