Automobile sector leads in India's foreign technical collaborations: RBI survey

MUMBAI: Companies with foreign technical collaboration (FTC) agreements for motor vehicles sectors had the highest share in total production of FTC companies in the country, according to the RBI's latest biennial survey released on Tuesday.

"The motor vehicles sector recorded 28.4 per cent production growth during 2022-23 as against 24.3 per cent growth registered by all FTC companies," the survey noted.

Japan, the US, and Germany remained the top three source countries for technology transfer, as per the survey respondents.

Out of the 709 Indian entities that participated in the latest survey round, 674 foreign technical collaboration (FTC) agreements were reported by 356 entities of which, 221 had also responded in the previous survey round.

Other highlights were that foreign direct investment (FDI) companies accounted for an overwhelming majority of the FTCs, over two-third of the FTC agreements involved technology know-how transfer or use of trademarks/brand names by foreign collaborators, and royalty payments was payment mode for over 70 per cent of the FTCs, with some having additional clauses for lump-sum technical fees.

Also, of the 674 reported FTC agreements, 198 had export restriction clauses and 217 had provision for exclusive rights on assets transferred under the pacts.

In terms of partner countries, technical collaborations with Japan continued to have the maximum export restriction clauses built into them, followed by the US and Germany among the source countries for technology transfer.

Exports and imports of FTC reporting companies grew by 19.8 per cent and 26.5 per cent, respectively, in 2022-23 - they had 13.6 per cent and 24.0 per cent shares, respectively, in the total value of production.

Average profitability of FTC reporting companies, measured by the ratio of gross profit to capital employed, stood at 10.5 per cent in the current survey round.