TaxTMI 
TaxTMI 
See Regulation 4 - Permissible Foreign Exchange Derivative Contract
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.... a contracted or anticipated exposure may be undertaken, as may be permitted by the Reserve Bank of India Provided further that transactions that involve the Rupee but are settled by delivery of a foreign currency shall be undertaken only by an authorised dealer or a person not resident in India and such other persons as may be permitted by the Reserve Bank of India, in terms of the directions issued in this regard by the Reserve Bank of India. ii. that such person shall share the details of the exposure with the authorised dealer when called upon to do so by the authorised dealer. 2. A person may enter into an exchange traded currency derivative contract on an exchange recognised under section 4 of the Securities Contr....
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..... 26-08-2002 before it was read as, "contracts involving rupee as one of the currencies, once cancelled shall not be re-booked although they can be rolled over at ongoing rates on or before maturity. This restriction shall not apply to contracts covering export transactions which may be cancelled, rebooked or rolled over at on-going rates." 3. Inserted vide Notification No. 104/2003 dated 21-10-2003, w.e.f. 21-10-2003. 4. Inserted vide Notification No.143/2005 dated 19-12-2005, w.e.f. 07-07-2003. 5. Inserted vide Notification No.143/2005 dated 19-12-2005, w.e.f. 07-07-2003. 6. Inserted vide Notification No. 159/2007 dated 17-09-2007, w.e.f. 13-12-2006. 7. Inserted vid....
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.... Substituted vide Notification No. FEMA.398/RB-2020 dated 18-02-2020, w.e.f. 18-02-2020 before it was read as, "A. Forward Contract 1. A person resident in India may enter into a forward contract with an authorised dealer in India to hedge an exposure to exchange risk in respect of a transaction for which sale and/or purchase of foreign exchange is permitted under the Act, or rules or regulations or directions or orders made or issued thereunder, subject to following terms and conditions- ^1[(a) the authorised dealer through verification of documentary evidence is satisfied about the genuineness of the underlying exposure or as otherwise permitted by the Reserve Bank from time to time.] (b) the ma....
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....n India to hedge an exposure to exchange risk in respect of transactions denominated in foreign currency but settled in Indian rupees. ^6[AA. Forward Contract in respect of Economic Exposure.-A person resident in India may, subject to such terms and conditions as may be stipulated by the Reserve Bank from time to time, enter into a forward contract with an authorised dealer in India to hedge an economic exposure to exchange risk in respect of such transactions as may be prescribed by the Reserve Bank from time to time.] B. Contract other than Forward Contract. 2. (1) A person resident in India who has borrowed foreign exchange in accordance with the provisions of Foreign Exchange Management (Borrowing and Lending ....
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....oreign exchange is also eligible for hedging under this sub-paragraph. (2) A Transactions undertaken under sub-paragraph (1) may be freely booked and/or cancelled. ^5[(3) A person resident in India may enter into a foreign currency-rupee option contract with an authorised dealer to hedge an exposure to exchange risk in respect of a transaction for which sale and / or purchase of foreign currency is permitted under the Act or the rules or regulations or directions or orders made or issued there under on the same terms and conditions applicable to forward contracts.] ^9[(4) A person resident in India may enter into cross-currency option cost reduction structures (not involving the rupee as one of the currencies) and....