Foreign exchange derivative hedging for non-residents formerly covered investment, dividend, trade, external borrowing, and subsidiary transaction currency risks. Schedule II under regulation 5 stands omitted. Before omission, it permitted persons resident outside India to hedge identified Indian currency exposures ... Summary
Foreign exchange derivative hedging for non-residents formerly covered investment, dividend, trade, external borrowing, and subsidiary transaction currency risks.
Schedule II under regulation 5 stands omitted. Before omission, it permitted persons resident outside India to hedge identified Indian currency exposures through authorised dealers, mainly with rupee-linked forward contracts. The framework covered investments, dividends, FCNR and NRE balances, portfolio and foreign direct investment, rupee-invoiced trade, Indian-rupee-denominated external commercial borrowings, and certain Indian subsidiary transactions. Specified users could also use foreign currency-rupee options, swaps and cost-reduction structures, subject to exposure verification and prescribed conditions.
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