The government of India is reportedly considering a proposal to
once again introduce limits on the amount of royalty payable by
Indian subsidiaries to their foreign parent firms for the use of
trademarks and brand names, or for technical services. These limits
were last applied in India nearly a decade ago.
A report published in Economic Times in December 2018 ago (See)
suggests that the Department of Industrial Policy and Promotion
(DIPP), under the Ministry of Commerce, is preparing a note for
consideration by the Union Cabinet along these lines.
According to the report, the royalty payout from firms for
intellectual property alone is estimated to be equal to 20% of the
total foreign direct investment (FDI) into the country. As per
official data, these royalty payments amounted to Rs 27,000 crore
(about $4 billion) in 2017-18, which was a significant increase
from the Rs 22,728 crore in the previous financial year.
Independent research by experts at the Indian
