Cabinet approves Commerce Min proposal on royalty payment

The Union Cabinet today approved a Commerce Ministry proposal to permit all payments for royalty, lumpsum fee for transfer of technology, payments for use of trademark/brand name on the automatic route without any restrictions and subject to FEMA (Current Account Transaction) Rules, 2000. To get the information about the nature/details of technology and the amount paid for it, a suitable post reporting requirement would be devised within three months in consultation with Department of Economic Affairs and the Reserve Bank of India (RBI). Hitherto, automatic approval was permitted for foreign technology transfers involving payment of lumpsum fee of 2 million US Dollars and a royalty of five per cent on domestic sales and eight per cent 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 two per cent for exports and one per cent for domestic sales is allowed under automatic route on use of trademarks and brand names of the foreign collaborator. As many as 8062 approvals have been granted for technology collaborations between 1991 and June this year.

The move is expected to freely promote the transfer of state-of-the-art technology into the country.

-- (UNI) -- 05DI19.xml

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