Indian firms ride high on trade in foreign tech collaboration

Japan, USA and Germany were the top three sourcing countries of technology transfer for Indian companies reporting Foreign Technical Collaboration agreements, says RBI survey report on ‘Foreign Collaboration in Indian Industry: 2012–2014’

By Sai Nikesh D

The manufacturing sector holds a dominant share of exports and imports by the Indian companies reporting Foreign Technical Collaboration (FTC) agreements, during 2012-14 period.

This was the outcome of the Reserve Bank of India’s survey report on ‘Foreign Collaboration in Indian Industry: 2012–2014,’ released on Tuesday, in which 303 Indian companies reported 528 FTC agreements of the total 826 companies that responded.

In its tenth round of survey covering the years 2012-13 and 2013-14, the RBI further said, “Under industry-wise distribution of FTC agreements, the share of manufacturing sector increased substantially during 2012-14, while the services decreased.”

The construction sector and agriculture-related activities witnessed a rise in their share in FTC agreements in 2012-14, compared to the ninth round of survey covering 2011-12 and 2013-13.

In the case of ‘export restrictive clauses’ also, the manufacturing sector increased marginally, the report added.

While the proportion of agreements with ‘exports restrictive clause’ increased with USA, UK, Italy, Switzerland, the same witnessed a decrease with Japan, Germany, Korea and France.

In terms of sources of technology transfer, Japan (25.2%), United States of America (13.1%) and Germany (12.2%) stood top by accounting for 51% share together, besides United Kingdom, Singapore, Italy, Mauritius, among others.

Under the category of assets transferred, the share of agreements providing ‘Know-how transfer’ took the lead with 66.9% increase compared to the ninth round, besides Trademark/ Brand Name, Patents, among others.

The proportion of FTC agreements providing exclusive rights on assets transferred (where a foreign collaborator involved in agreement with an Indian company cannot transfer assets to any other Indian party), increased significantly in manufacturing sector and services sector in 2012-14, against 2010-12.

Going by the statistics, while the total exports of FTC reporting companies increased from 182.8 billion in 2012-13 to 203.7 billion in 2013-14, the imports rose from 452.5 billion to 476.8 billion over the same period.

The total value of production of the FTC reporting companies, according to the report, stands at 1954.2 billion in 2013-14, which is above the total value of production of 1826.7 billion in 2012-13.

 

This article was published in The Dollar Business on March 25, 2015.

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