POLICY ON PAYMENT FOR FOREIGN TECHNOLOGY COLLABORATION LIBERALIZED
The Union Cabinet, on November 5, 2009, approved a proposal of the Department of Industrial Policy & Promotion, Ministry of Commerce & Industry to permit the following payments under automatic route and subject to FEMA (Current Account Transaction) Rules, 2000; without any restriction:
- Payments for royalty / lumps sum fee for technology transfer
- Payments for use of trademark/ brand name
Post Reporting Requirements
In order 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 Reserve Bank of India.
Existing caps on royalty payments - Automatic Route
Under Foreign Technology Collaborations for foreign technology transfers
Nature of Payment Existing ceilings
Lump sum payment up to USD 2 Million
Recurring payment 5% of domestic sales
8% of export sales
For use of Trademark/ Brand Name of foreign collaborator without technology transfer
Nature of Payment Existing ceilings
Recurring payment 1% of domestic sales
2% of export sales
Beyond above limits, prior permission of the Government of India was required
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