Royal Dilemma

Business Today - - THE BUZZ - - Anilesh S. Ma­ha­jan

A SE­RIES OF ‘NOT- quitein­meet­ings be­tween the fi­nance min­istry and the min­istry of com­merce on roy­alty pay­ment caps, and tech­ni­cal fees for multi­na­tional com­pa­nies, ended up at the Prime Min­is­ter’s doorstep. The fi­nance min­istry ear­lier said com­pa­nies shouldn't have to seek prior ap­proval for roy­alty pay­ment repa­tri­a­tion. The com­merce min­istry, how­ever, has been de­mand­ing a strict sys­tem of caps be im­posed af­ter re­ports that roy­alty repa­tri­a­tions to par­ent com­pa­nies abroad were very high, es­pe­cially from auto com­pa­nies. Fi­nance min­istry of­fi­cials say a cap may de­ter in­vestors, com­merce min­istry of­fi­cials as­sert that the caps as sug­gested are within the frame­work agreed upon at WTO and will serve to curb forex out­flow. Who the PMO fi­nally sides with re­mains to be seen.

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