A slow drive

19 August 2020 By Una Galani Follow @ugalani

Officials want carmakers like $28 bln Maruti Suzuki to reduce fees paid to foreign partners for brands and know-how. Shareholder approval for such payments can be tightened up too. But India’s drive for more domestic R&D and self-sufficiency in the sector will be a slow one.

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India’s commerce minister, Piyush Goyal, has asked automakers to find ways to reduce royalty payments to foreign parent companies for the use of technology or brand names, Reuters reported on Aug.18, citing two sources.

The minister in a meeting last week asked officials from groups representing carmakers and auto-parts manufacturers to review such payments with a view to reducing them, people with direct knowledge of the discussions said. The aim is to boost local investment and to reduce outflows, the report added.

"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 ministry did not respond to a Reuters request for comment.

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