Hedging by non resident parents permits booking forex derivatives to hedge Indian subsidiary exposures under RBI prescribed conditions. Non resident parents or their treasuries may enter into FCY INR derivative contracts with AD Category I banks to hedge currency risk of and on behalf of their Indian subsidiaries, subject to Reserve Bank terms. Transactions must be governed by a tri partite agreement detailing roles and settlement; non resident entities must be in FATF or equivalent jurisdictions; AD banks must perform KYC/AML, monitor underlying exposures, ensure profits/losses are settled in the subsidiary's accounts with auditor certification, and report contracts to CCIL with a special tag.