This character is a Other Letter and is mainly used in the Arabic script.
The glyph is not a composition. It has no designated width in East Asian texts. In bidirectional text it is written as Arabic letter from right to left. When changing direction it is not mirrored. The word that U+06D2 forms with similar adjacent characters prevents a line break inside it. The glyph can be confused with one other glyph.
The Wikipedia has the following information about this codepoint:
Baṛī ye (Urdu: بَڑی يے, Urdu pronunciation:[ˈbəɽiːˈjeː]; lit. "greater ye") is a letter in the Urdu alphabet (and other Indo-Iranian language alphabets based on it) directly based on the alternative "returned" variant of the final form of the Arabic letter ye/yāʾ (known as yāʾ mardūda) found in the Hijazi, Kufic, Thuluth, Naskh, and Nastaliq scripts. It functions as the word-final yā-'e-majhūl ([eː]) and yā-'e-sākin ([ɛː]). It is distinguished from the "choṭī ye (چھوٹی يے; "lesser ye")", which is the regular Perso-Arabic yāʾ (ی) used elsewhere. In Punjabi, where it is a part of the Shahmukhi alphabet, it is called waḍḍī ye (Punjabi: وَڈّی یے) with the Gurmukhi equivalent ਏ.
It is also used in the Pakistani Pashto alphabet, with the Afghani equivalent being ی.