Foreign Technology Collaboration in India

Abstract:

The main aim of the Foreign Technology Collaboration in India is its technological development. Efficiency and productivity of Indian industries can be increased with use of improved technology through Foreign Technology Collaborations.

Foreign Technology Collaboration-Glimpses

Foreign Technology Collaboration in India permits transfer of technology by the means of Government approval or through the automatic route delegated by RBI. The collaboration induces the required amount of technological development and promotion of technologically advanced industries. Foreign Technology Collaboration in India is undertaken with the objective of improving technology levels in the Indian industries. This helps to increase the efficiency and productivity of the industries in India.

Foreign Technology Collaboration-Methods of approval

The methods of approval Foreign Technology Collaboration in India helps in effective transfer of technical aspects. The transfer of foreign technology plays an important role in the Foreign Direct Investments. With the introduction of the 1991 Economic Policy, foreign investments started inflowing in large amounts. The Central government has allowed the transfer of technology in various industrial sectors. Significant technology transfers have taken place since the economic reforms.

The Central Government presented the Statement on Industrial Policy in 1991, which provided simplified methods for the better governance of the Foreign Technology Agreements. Sec 39C deals with Foreign Technology Agreements. There are certain standardized clauses for the approval of the Foreign Technology Collaboration in India.

The approval techniques follow two methods, namely automatic approval and government approval.

Government Approval

The manufacturing and products should be compliant with the small scale industries
Proposals which involve previous trademark agreement, joint ventures, technology transfer, etc
In case of an extension of the foreign technology collaboration agreements which had been automatically approved earlier

Automatic Approval

The royalty paid is 1 % in case of domestic sales and 2 % in case of exports as granted under automatic route for use of the trademark foreign collaborator

The royalty to be paid is restricted to 5 % in case of domestic sales, 8 % in case of exports and total payment should be 8 % on sales for a period of 10 years

The royalty paid is 5 % in case of domestic sales and 8 % in case of exports as granted under automatic route for wholly owned subsidiaries

For further information on Foreign Technology Collaboration in India the following links can be referred to

Last Updated on 3/18/2011