|
Foreign
Technology Collaboration
Foreign
Technology or Technical Collaborations generally cover
transfer of the following :
- Process
know-how
- Design
know-how
- Engineering
know-how
- Manufacturing
know-how
- Application
know-how
- Technology
know-how
- Management
know-how
Foreign
Technology Agreements
Foreign
technology collaborations are permitted either through
the automatic route under delegated powers exercised
by the Reserve Bank of India (RBI) or by the Government.
Automatic
Route
The
Reserve Bank of India, through its regional offices,
accords automatic approval to all industries for foreign
technology collaboration agreements subject to
-
the lump sum payments not exceeding US $ 2 Million;
-
royalty
payable being limited to 5 per cent for domestic
sales and 8 per cent for exports, subject to a total
payment of 8 per cent on sales over a 10 year period;
and
-
the
period for payment of royalty not exceeding 7 years
from the date of commencement of commercial production,
or 10 years from the date of agreement, whichever
is earlier. These royalty limits are net of taxes
and are calculated according to standard conditions.
For
foreign technology agreements in respect of hotel and
tourism related industries, automatic approval is granted
if
- upto
3% of the capital cost of the project is proposed
to be paid for technical and consultancy services
including fees for architecture, design, supervision,
etc.;
- upto
3% of the net turnover is payable for franchising
and marketing/publicity support fee, and
- upto
10% of gross operating profit is payable for management
fee, including incentive fee.
Government
Route
For
the following categories, Government approval would
be necessary:
-
proposals attracting compulsory licensing;
-
items of manufacture reserved for the small scale
sector;
-
proposals involving any previous joint venture,
or technology transfer/trademark agreement in the
same or allied field in India. The definition of
"same" and allied field would be as per
4 digit NIC 1987 Code and 3 digit NIC 1987 Code;
-
extension
of foreign technology collaboration agreements (including
those cases which may have received automatic approval
in the first instance);
-
proposals
not meeting any or all of the parameters for automatic
approval as given above.
Procedures
for Approvals
Procedure
for Automatic Approval
Applications
for automatic approval for such foreign technology agreements
should be submitted in Form FT (RBI) with the concerned
Regional Offices of Reserve Bank of India. No fee is
payable. Approvals are given within 2 weeks.
Procedure
for Government Approval
All
other proposals for foreign technology agreement, not
meeting any or all of the parameters for automatic approval,
and all cases of extension of existing foreign technical
collaboration agreement, are considered for approval,
on merits, by the Government. Application in respect
of such proposals should be submitted in Form FC-IL
to the Secretariat for Industrial Assistance, Department
of Industrial Policy & Promotion, Ministry of Commerce
and Industry, Udyog Bhavan, New Delhi. No fee is payable.
The following information should form part of the proposals
submitted to SIA:
-
Whether
the applicant has had or has any previous financial/technical
collaboration or trade mark agreement in India in
the same or allied field for which approval has
been sought; and
-
If
so, details thereof and the justifications for proposing
the new venture/technical collaboration (including
trade marks).
On
consideration of the proposal by the Project Approval
Board/FIPB, decisions are normally conveyed within 4
to 6 weeks of filing the application. When a collaboration
is approved by the Reserve Bank or the Government of
India (as the case may be), a letter of approval is
issued indicating the terms and conditions of the approval,
a copy of which is issued to the designated branch of
an authorized dealer (bank as mentioned in the application).
A
registration number is granted by Reserve Bank when
an approval is accorded for foreign technical collaboration
under the Automatic Route. When the approval is granted
by the Government, the Indian company should obtain
a registration number for the collaboration agreement
from the concerned regional office of Reserve Bank.
The
Indian company which has obtained approval for the foreign
technical collaboration agreement should file a copy
of the agreement with the designated branch of the authorized
dealer (bank) through whom remittances falling due under
the collaboration agreement would be made.
Remittances
under the agreement can be made only after a registration
number has been granted by Reserve Bank.
|
