Structuring a Multinational's India Cash Repatriation and FX Hedging Under RBI Rules
This multinational's India subsidiary was accumulating INR cash with no structured repatriation plan and no FX hedging policy against its rupee exposure. A2 structured a compliant repatriation route, designed a hedging policy, and set up cash pooling under RBI rules. [PLACEHOLDER: replace with your real client details
[PLACEHOLDER CASE STUDY: edit this with your real client's details, dates, and outcome before publishing.] The starting point was reviewing how INR cash had been accumulating in the India subsidiary with no defined repatriation cadence, and no policy governing the group's exposure to rupee movements.
Structuring a compliant repatriation route
Dividend repatriation was structured against the subsidiary's distributable profits and applicable withholding tax, with the timing and documentation sequenced to meet RBI reporting requirements without leaving cash idle longer than necessary.
Designing an FX hedging policy
A hedging policy was designed to cover the group's known INR exposure from the subsidiary's operations, balancing the cost of hedging instruments against the currency risk the group was otherwise carrying unhedged.
Setting up cash management and pooling under FEMA
Cash management arrangements, including pooling structures permitted under FEMA, were set up to reduce idle balances across the group's India and overseas accounts while staying within RBI's regulatory limits on cross-border cash movement.
The Result
The subsidiary moved from ad hoc, undocumented cash accumulation to a structured repatriation and hedging program, with cash management arrangements keeping balances working rather than sitting idle.
Key outcomes
- Dividend repatriation structured and sequenced against RBI reporting requirements
- FX hedging policy designed against the group's actual INR exposure
- FEMA-compliant cash pooling arrangements set up to reduce idle balances
- Repatriation moved from ad hoc to a defined, recurring cadence
Why This Matters Beyond This Case
[PLACEHOLDER: replace this section with your own framing.] Multinationals with an India subsidiary often let INR cash accumulate without a repatriation plan simply because no one owns the decision, and by the time someone does look at it, there's both a larger cash balance and a larger unhedged currency exposure to unwind at once.