mercurial/help/diffs.txt

Mercurial's default format for showing changes between two versions of
a file is compatible with the unified format of GNU diff, which can be
used by GNU patch and many other standard tools.

While this standard format is often enough, it does not encode the
following information:

- executable status and other permission bits
- copy or rename information
- changes in binary files
- creation or deletion of empty files

Mercurial also supports the extended diff format from the git VCS
which addresses these limitations. The git diff format is not produced
by default because a few widespread tools still do not understand this
format.

This means that when generating diffs from a Mercurial repository
(e.g. with "hg export"), you should be careful about things like file
copies and renames or other things mentioned above, because when
applying a standard diff to a different repository, this extra
information is lost. Mercurial's internal operations (like push and
pull) are not affected by this, because they use an internal binary
format for communicating changes.

To make Mercurial produce the git extended diff format, use the --git
option available for many commands, or set 'git = True' in the [diff]
section of your hgrc. You do not need to set this option when
importing diffs in this format or using them in the mq extension.