November 5, 2009 6:32 PM

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Cabinet approves payments for royalty and lumpsum fee for transfer of technology

The Union Cabinet today approved a Commerce Ministry proposal to permit all payments for royalty, lumpsum fee for transfer of technology, payments for use of trademark on the automatic route without any restrictions and subject to FEMA (Current Account Transaction) Rules, 2000. <br/>Briefing newsmen after cabinet meeting in New Delhi today, the Information and Broadcasting Minister, Mrs Ambika Soni said that automatic approval was permitted for foreign technology transfers involving payment of lumpsum fee of 2 million US Dollars and a royalty of five per cent on domestic sales and eight per cent on exports. She said beyond these limits, prior permission of the Project Approval Board was required. <br/>In addition, where there is no technology transfer involved, royalty up to two per cent for exports and one per cent for domestic sales is allowed under automatic route on use of trademarks and brand names of the foreign collaborator. <br/>

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