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Home arrow Automotive arrow Union Cabinet approves DIPP proposal on Foreign Technology Collaborations
Union Cabinet approves DIPP proposal on Foreign Technology Collaborations Print E-mail
Written by Anand   
Friday, 06 November 2009
New Delhi: A proposal of the Department of Industrial Policy & Promotion, Ministry of Commerce & Industry to permit all payments - for royalty, transfer of technology, use of trademark/brand name - on the automatic route without any restrictions, and subject to FEMA (Current Account Transaction) Rules, 2000, was approved by the Union Cabinet today.

A suitable post reporting requirement would be devised within three months, to get the information about the nature/details of technology and the amount paid for it, in consultation with Department of Economic Affairs and Reserve Bank of India.

This move is expected to promote the transfer of state of art technology into the country.

So far automatic approval was permitted for foreign technology transfers involving payment of lumpsum fee of US$ 2 million and royalty of 5% on domestic sales and 8% on exports. Beyond these limits, prior permission of the Government of India (Project Approval Board) was required.

In addition, where there is no technology transfer involved, royalty upto 2% for exports and 1% for domestic sales is allowed under automatic route on use of trademarks and brand names of the foreign collaborator. 8062 approvals have been granted for technology collaborations since 1991 to June 2009.

 
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