Thanks Ken. I can see some resutls now however the following issues exists:

(1)errors:
readline<> on unopened filehandle at line33
which is : while (<$in_fh>)

(2)my FILE0 is being skipped and only FILE1 and FILE2 are being processed

(3)Could you please give me quick explanation of whats going on within the subroutine write_xml_contents so that I can tweak my output as I desire.
here is my code:

#!/strawberry/perl/bin/perl

#use strict;
use warnings;
use autodie;

open my $out_fh, '>', 'out_data.txt';

my %source_file_for = (File0 => 'FILE0.xml', File1 => 'FILE1.xml', Fil
+e2 => 'FILE2.xml');

#my $out_fh = \*STDOUT;
my $key_file = 'File0';
my @feature_files = qw{File1 File2};

print $out_fh '<Key="1234">';
write_xml_content($key_file, $source_file_for{$key_file}, $out_fh, ' '
+ x 4);

print $out_fh "\n".'    <Status="in use"/>
    <Features>';

    for (@feature_files) {
    open my $in_fh, '<', $source_file_for{$_};
    write_xml_content($_, $in_fh, $out_fh, ' ' x 8);
    close $in_fh;
}
print $out_fh "\n".'    </Features>
    <Other_Status/>
</Key>';

sub write_xml_content {
    my ($file_id, $in_fh, $out_fh, $indent) = @_;
    
    while (<$in_fh>) {
        chomp;

        if (/^<\/?doc>$/) {
            s/doc/$file_id/;
        }
        else {
            if (/^<ABC id="(\d+)">$/) {
                my $id = $1;
                s/$id/$file_id-$id/;
            }
            $_ = ' ' x 4 . $_;
        } 

        print $out_fh $indent, $_;
    }
}
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