Hello @knaik99,
In MPLS, the [RD] is used to uniquely identify VPN routes within a particular VPN. The RD is locally significant, which means it only needs to be unique within the context of the VPN it belongs to.
When configuring MPLS VPNs for different sites of a company, you can indeed use different RD values at each site. Each site's RD will ensure that the VPN routes from that site are uniquely identified within the VPN.
The combination of the RD and the IPv4 prefix forms the VPNv4 route. These VPNv4 routes are exchanged between the PE routers in the BGP update messages. When a PE router receives a VPNv4 route, it associates the VPNv4 route with a specific VRF instance based on the RD.
Each PE router maintains multiple VRFs, one for each VPN. When a VPNv4 route is received, the RD helps the PE router determine which VRF to place the route in, and then the route is installed in the corresponding VRF's routing table.
For example, if ABC company has multiple sites connected via MPLS VPN and each site has a different RD configured, the BGP updates will carry the VPNv4 routes with the appropriate RD. When a PE router receives a VPNv4 route with a specific RD, it will place the route into the VRF associated with that RD, ensuring that the route is correctly forwarded to the appropriate site within ABC company.
