Manufacturing Sector Accounts For 78% Of Foreign Technical Collaborations, RBI Survey Reveals

The survey captures information on financial parameters and operations of the Indian companies having technical collaboration with foreign companies during the reference period.

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, the survey found.

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Manufacturing sector accounted for 78 per cent of the total reported Foreign Technical Collaborations (FTCs) with Japan, the US, and Germany remaining the top three source countries for technology transfer, a Reserve Bank of India (RBI) survey said on Tuesday.

Of the 709 Indian entities that participated in the latest survey round, the RBI said 674 FTCs agreements were reported by 356 entities, of which, 221 had also responded in the previous survey round.

Foreign Direct Investment (FDI) companies accounted for an overwhelming majority of the FTCs.

Further, foreign subsidiaries (single foreign investor holding over 50 per cent of the total equity) and foreign associate companies (foreign investors' equity holding ranging from 10-50 per cent) reported a 71 per cent and 18 per cent of FTC agreements, respectively.

"Among economic sectors, manufacturing and services sectors accounted for 78 per cent and 17 per cent of the total reported FTCs, respectively; machinery, transport equipment, chemicals and chemical products together accounted for over 40 per cent share in the manufacturing sector," the survey said.

The construction sector accounted for nearly 3 per cent of the total FTCs.

The survey captures information on financial parameters and operations of the Indian companies having technical collaboration with foreign companies during the reference period.

It was the 14th round of the RBI's biennial survey on foreign collaboration in Indian industry covering 2021-22 and 2022-23 fiscal years.

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

Over two-thirds of the FTC agreements involved technology know-how transfer or use of trademarks/brand names by foreign collaborators.

Also, royalty payments were payment mode for over 70 per cent of the FTCs, with some having additional clauses for lump-sum technical fees.

The RBI said 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.

Further, companies with FTC agreements for motor vehicles sectors had the highest share in total production of FTC companies -- 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.

(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)