- Authorities have always pushed for more investment in local R&D to create high-value jobs
- Maruti comes under the scanner since it enjoys a sizeable share of the passenger car market
Royalties are usually an outcome of partnerships that are inked between multinational and Indian companies. More so when the latter is allowed to use the brand-name and technology that was developed abroad.
Currently, these fees attract all the wrong attention as India strides along its ambitious plan for home-grown brands to invest more in local research and development. An intent to create higher-value jobs, or as the honourable Prime Minister Narendra Modi said, “A more self-reliant India”.
Sources now report that officials are now pushing Indian carmakers like Maruti to drop their royalty fees paid to foreign partners. But the concern is that most Indian automakers have partnered with some sort of foreign ally to get a slice of their tech.
Although the intent for reducing these payments seems logical, the hunt for a domestic R&D alternative for our home-grown automakers isn’t one that can stem overnight. It’s a situation that could render the Indian carmaker uncompetitive if the overseas ties are damaged. Food for thought?
