Hi @kumar kaushal · Thank you for reaching out.
Best way to configure name resolution would be to set the IP address of the Azure Provided DNS under the Forwarders tab of your DNS server. The DC will then forward all requests to Azure Provided DNS IP address if the DC itself doesn't have required set of resource records to perform name resolution.
If you have configured a default route (0.0.0.0/0) with next hop address of your proxy device, all internet traffic will be routed via proxy regardless of whether it is for 168.x.x.x range or any other destination service/port.
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