The Hindu Business Line : All tech transfer payments, fee via automatic route now

New Delhi, Nov. 6 The Government on Thursday cleared a proposal that will permit all payments for royalty, lump-sum fee for transfer of technology, payments for use of trademark and brand name, on the automatic route.

This will be subject to FEMA (Current Account Transaction) Rules, 2000. The move is aimed at promoting transfer of latest technology into the country.

To get the information about the nature or details of technology and the amount paid for it, a suitable post reporting requirement would be devised within three months in consultation with the Department of Economic Affairs and Reserve Bank of India.

As many as 8,062 approvals have been granted for technology collaboration between 1991 and June 2009.

Prior to this, automatic approval was permitted for foreign technology transfers involving payment of lump-sum fee of $2 million and royalty of 5 per cent on domestic sales and 8 per cent on exports. Beyond these limits, prior permission of the Government (approval from Project Approval Board) was required.

Also, in those cases where no technology transfer was involved, royalty up to 2 per cent for exports and 1 per cent for domestic sales was allowed under automatic route on use of trademarks and brand names of the foreign collaborator.