i have studied some provisions of FEMA and LRS …
Capital account transactions are allowed to only if specifically allowed under to Fema act.
Current account transactions are allowed unless specified disallowed under the Fema act.
so Doing investment outside India comes under capital account transactions…
Schedule I of Foreign Exchange Management (Permissible capital account transactions) Regulations, 2000 includes the Classes of Permissible Capital Account Transactions for resident Indians
& this schedule include following point.
Investment by a person resident in India in foreign securities
also Remittance from India for margins or margin calls to overseas exchanges / overseas counterparty is not allowed under LRS
Now provision under LRS is not disallowing from trading derivatives specifically…
** also under Schedule I** which include permissible capital account transactions includes another point … which is
Sale and purchase of foreign exchange derivatives in India and abroad and commodity derivatives abroad by a person resident in India.
SO forex derivatives and commodity derivatives are allowed for resident individual
just check this link of the website of RBI and read schedule 1
https://www.rbi.org.in/Scripts/BS_FemaNotifications.aspx?Id=155#sch1
I dont know where its specifically… written that we cant buy stock options
Yes there is lot of confusion
So i thought why i should not ask RBI directly?
i filled RTI with RBI to get some information…
so i got following reply from RBI
so
investment is allowed (we already know)
and moreover commodity derivative is allowed for hedging purpose and RBI has issued some notification for the same.
and just see the answer of 2nd question
they said we don’t have information about this…