In the last one year the Reserve Bank of India (RBI) granted permission under the automatic approval scheme, to about 60 per cent of all the technology import licences in India. The government in the same period approved about 341 cases of technology transfer, of which only 15 provided for lump-sum know-how fees above US dollars 2 million.
The automatic route supervised by the RBI permits a maximum lump-sum know-how fee of US dollars 2 million, royalty payments of 5 per cent on domestic sales and 8 per cent on export sales. On 4th September 1998, the government with a view to enhance the competitive ability of Indian industry, has announced that henceforth these limitations would not apply incase of technology imports in projects assessed and funded by Financial Institutions (FI's) and projects of central and public sector undertakings (PSU's).
Hence, once the financial institution or the Chief Executive Officer of the PSU would consider and approve the terms of lump-sum know-how fee and royalty payments, the RBI would automatically grant permission to the technology transfer license. This decision will ensure that in critical sectors the countries endeavour to acquire competitive technologies would not be hampered by the limits placed on know-how fee and royalty payments, which in case of advanced technology may be on the higher side.
To ensure that unnecessary technologies are not imported, the Ministry of Industries will shortly release a negative list of technologies detrimental to national interest. Further the Ministry of Finance will make changes in the proposed Foreign Exchange Management Bill, to effectively deal with the misuse and fraud in import of technology.
This article is correct to the best of our knowledge as at the time of its publication. However, it is written as a general guide. Therefore specialist advice should be always be sort.
FOR FURTHER INFORMATION PLEASE CONTACT:
The automatic route supervised by the RBI permits a maximum lump-sum know-how fee of US dollars 2 million, royalty payments of 5 per cent on domestic sales and 8 per cent on export sales. On 4th September 1998, the government with a view to enhance the competitive ability of Indian industry, has announced that henceforth these limitations would not apply incase of technology imports in projects assessed and funded by Financial Institutions (FI's) and projects of central and public sector undertakings (PSU's).
Hence, once the financial institution or the Chief Executive Officer of the PSU would consider and approve the terms of lump-sum know-how fee and royalty payments, the RBI would automatically grant permission to the technology transfer license. This decision will ensure that in critical sectors the countries endeavour to acquire competitive technologies would not be hampered by the limits placed on know-how fee and royalty payments, which in case of advanced technology may be on the higher side.
To ensure that unnecessary technologies are not imported, the Ministry of Industries will shortly release a negative list of technologies detrimental to national interest. Further the Ministry of Finance will make changes in the proposed Foreign Exchange Management Bill, to effectively deal with the misuse and fraud in import of technology.
This article is correct to the best of our knowledge as at the time of its publication. However, it is written as a general guide. Therefore specialist advice should be always be sort.
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