Recently, PM Modi took an initiative naming it as ‘Atma Nirbhar Bharat’, the change after this initiative is evident in all sectors of work in India. Recently, India’s commerce minister Piyush Goyal has asked automakers to find ways to reduce royalty payments to foreign parent companies for using their technology or brand names, in an effort to boost local investment and reduce outflows, a close source reported.
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In India’s competitive auto market, one of the highest demanding carmakers Maruti Suzuki and Hyundai Motor’s local unit pay millions of dollars as royalties to parent companies in Japan and South Korea for using their technology and brand to build and sell cars. Commerce Minister, Piyush Goyal, in a meeting that was organized last week, asked officials from groups representing carmakers and auto parts manufacturers to review such payments with a view to reducing them and he also emphasized that it can be discussed as well with parent foreign companies.
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“The concern raised during the meeting was that the outflow is high, even for old technologies, and something should be done about it,” said one of the sources. The sources who reported the given information preferred to stay unanimous as the talks are private. The ministry did not respond to a request for comment. India, for years, has debated imposing stricter caps on royalty payments which rose after 2009 when foreign investment rules were given relaxations and curtailment on such payments were removed.