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New rules approved for Foreign Technology Collaborations | The Government on Thursday agreed to frame new rules for payments for royalty, lump-sum 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. A suitable post- reporting requirement would
be devised within three months in consultation with Department of Economic Affairs
and Reserve Bank of India to get the information about the nature/details of technology
and the amount paid for it. Previously, automatic approval was permitted for foreign
technology transfers involving payment of lump-sum fee of two million dollars
and royalty of 5 percent on domestic sales and 8 percent on exports. Beyond these
limits, prior permission of the Government (Project Approval Board) was required.
In addition, where there is no technology transfer involved, royalty up to two
percent for exports and one percent for domestic sales is allowed under automatic
route on use of trademarks and brand names of the foreign collaborator. The decisions
were taken at the Union Cabinet at its meeting today. The move is expected to
freely promote the transfer of state of art technology into the country. |
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