Its not just about buying USD with INR. Its about buying USD with INR IN INDIA then getting that USD to someplace where you can get it onto a non indian BTC exchange.

You need two ends to do this, the indian end and the US (or other non indian country) end. At some point, the indian end has to get cash from his titties to the US guys titties.

So yeah, you can USD's for INR. But you can't get the proceeds from selling the bitcoin on the indian exchange into your paypal account. Because theyre going to an indian bank account, and they need to withdrawal to an indian paypal account.

Which can't send international payments, because of regulations. The same regulations stop you with WU, MG and most conventional methods of getting money across borders. You could roll it into a wad, put it in your rectum and try to get it out of the country on a plane, but since they only have small bills right now that would be pretty uncomfortable.

surely it wouldn't cost 35%.

don't call me shirley.

For the typical man on the street, if it was possible at all to get money out (which im not sure it would be for anything but relatively small amounts) that seems about right-ish. I charge between 15 and 45%, depending on the client, the country and the direction money has to move. We don't do a ton of business in india, and all of it is money moving in the wrong direction (and none of my personal clients are there) but its definitely one of the most problematic countries we would be willing to work with.

For someone like me, with access to legions of permissive merchant accounts, no moral compass, and a willingness to get creative with fincen, it might be doable. I actually wasn't aware this arbitrage opportunity existed until i saw your post. Im working on finding a way to make me some cash off of this. At the very least, our indian clients are going to get a rate hike.