Forward contract expansion allows hedging of FDI inflows, foreign currency INR settlements, and cross currency FCNR(B) balances. Non-resident investors may book forward sale contracts with Authorised Dealers to hedge currency risk on proposed FDI after completing required approvals; tenors limited to six months unless Reserve Bank permission is obtained, cancellations cannot be rebooked, and exchange gains on cancellation will not be passed to the investor. Residents may obtain forward cover for foreign currency denominated transactions settled in Indian rupees, with cash settlement by cancellation at maturity and no rebooking of cancelled contracts. FCNR(B) depositors may book cross currency forwards to convert permitted foreign currency balances; cancelled contracts are ineligible for rebooking.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Forward contract expansion allows hedging of FDI inflows, foreign currency INR settlements, and cross currency FCNR(B) balances.
Non-resident investors may book forward sale contracts with Authorised Dealers to hedge currency risk on proposed FDI after completing required approvals; tenors limited to six months unless Reserve Bank permission is obtained, cancellations cannot be rebooked, and exchange gains on cancellation will not be passed to the investor. Residents may obtain forward cover for foreign currency denominated transactions settled in Indian rupees, with cash settlement by cancellation at maturity and no rebooking of cancelled contracts. FCNR(B) depositors may book cross currency forwards to convert permitted foreign currency balances; cancelled contracts are ineligible for rebooking.
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