Goyal Asks Auto Firms To Reduce Royalty Payments To Their Parent Companies

Royalty is paid to a foreign collaborator for the transfer of technology, usage of brand or trademarks. Goyal also said, “Should it be advisable that we have a phased increase in import duty, to encourage more and more auto companies particularly the newer ones who are coming in with completely knock-down kits or semi-knock-down kits and just assembling them in India? We are open to suggestions that the industry as a whole comes up with.” He said certain issues like tariff and non-trade barriers imposed by other countries hamper India’s auto exports. Citing examples, he said countries like Australia have certain import duties and Indonesia puts quotas for import. “We are working to resolve the issues…With Australia, we have a good dialogue. I have flagged the matter with Indonesia. Industry should get fair access,” he said.

On the issue of Quality Control Orders (QCO), Goyal said that these should not be seen as barriers. “It is high time India starts looking at quality control and provides the world with high-quality products. Once we get the quality consciousness in the country as a whole, we will transform India’s future, and that is the effort we are taking,” he added.

He also said that to help the auto industry with affordable logistics options, Indian Railways is ready to reduce freight rate. The automakers should find out innovative finance options, which would attract the financiers to lend money, as well as attract the buyers.

He added that to help the auto sector, especially exporters, the government will be happy to come up with innovative credit guarantee schemes. “India is willing to provide a very facilitative environment to companies, looking for a more trusting trade partner and a better supply chain. We have to look at sectors where we have the edge over other countries,” Goyal said.