Royalty payment is the amount paid by companies for the use of brand or technological know-how to the owner company. In December 2009, the limit of remittance, which was set at 5 per cent of domestic sales or 8 per cent of exports, was abolished to attract foreign investments. After this revocation, companies witnessed a jump in the royalty payment and at the same time a dip in domestic investors' profit. With the rupee weakening, the government is planning to bring back such restrictions to stem the flow of dollars from the country.
There are 114 domestic listed subsidiaries paying royalty to foreign promoters in FY13. These Indian listed subsidiaries have paid Rs 12.238 crore as the total royalty in FY13.
Out of 10 top royalty paying companies, eight witnessed royalty growth more than their sales in the last three years.
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