The existing policy of Government of India on the payment of royalties
under Foreign Technology Collaboration provides for automatic approval for
foreign technology transfers involving payment of lumpsum
fee of US$ 2 million and payment of royalty of 5% on domestic sales and
8% on exports. In addition, where there is no technology transfer involved,
royalty up to 2% for exports and 1% for domestic sales is allowed under
automatic route on use of trademarks and brand names of the foreign
collaborator. Separate norms are available for the hotel sector vide Press Note
18 (1991 Series) and Press Note 1 (1995 Series). Technology transfers involving
payments above these limits required prior permission of the Government of
India (Project Approval Board, Department of Industrial Policy and Promotion).
The Government of India has reviewed the extant policy and it has been
decided to permit, with immediate effect, payments for royalty, lumpsum fee for transfer of technology and payments
for use of trademark/brand name on the automatic route i.e. without any
approval of the Government of India. All such payments will be subject to
Foreign Exchange Management (Current Account Transactions) Rules, 2000 as
amended from time to time.
A suitable post-reporting system for technology transfer/ collaborations
and use of trade mark/ brand name will be notified by the Government
separately.
These guidelines issue in modification of provisions relating to foreign
technology proposals/approvals contained in paragraph 3 of Press Note 10
(1991), para 7 of Press Note 11 (1991), para 4 & 5 (a) of Press Note 12 (1991), para 2-6 of Press Note 20 (1991), para
2 of Press Note 5 (1992), para 4 of Press Note 4
(1994), para 3 of Press Note 18 (1997) and paragraphs
III and IV of Press Note 9 (2000). These guidelines will issue in supersession of provisions of Press Note 18 (1991), Press
Note 4 (1992), Press Note 1 (1995), Press Note 4 (1996), Press Note 1 (2002)
and Press Note 2 (2003).
Department of Industrial
Policy & Promotion, Ministry of Commerce & Industry
Press Note No.8 (2009 series), New Delhi, 17th
December, 2009
RJ/MRS