The locally noncentrosymmetric heavy fermion superconductor CeRh₂As₂ has attracted considerable interests due to its rich superconducting phases, accompanied by possible quadrupole density wave and pronounced antiferromagnetic excitations. To understand the underlying physics, here we report measurements from high-resolution angle-resolved photoemission. Our results reveal fine splittings of the conduction bands related to the locally noncentrosymmetric structure, as well as a quasi-two-dimensional Fermi surface (FS) with strong 4f contributions. The FS shows signs of nesting with an in-plane vector q₁ = (π/a, π/a), which is facilitated by the heavy bands near X ¯ arising from the characteristic conduction-f hybridization. The FS nesting provides a natural explanation for the observed antiferromagnetic spin fluctuations at (π/a, π/a), which might be the driving force for its unconventional superconductivity. Our experimental results can be reasonably explained by density functional theory plus dynamical mean field theory calculations, which can capture the strong correlation effects. Our study not only provides spectroscopic signature of the key factors underlying the field-induced superconducting transition, but also uncovers the critical role of FS nesting and lattice Kondo effect in the underlying magnetic fluctuations.