Automakers in India should cut royalty payments to foreign parent firms - official

  • Reuters
  • Stock Market News
Automakers in India should cut royalty payments to foreign parent firms - official
Credit: © Reuters.

NEW DELHI, Sept 17 (Reuters) - Indian carmakers should reduce royalty payments to foreign partners to bring down costs instead of seeking tax cuts, a finance ministry official said on Thursday, days after reports that Toyota 7203.T would halt expansion in the country due to high taxes.

Last month India's commerce minister said in a meeting with Indian automakers, including local representatives from Toyota and Maruti Suzuki (NS: MRTI ), that they should find ways to reduce royalty payments to foreign parent companies for use of technology or brand names. Suzuki paid 38.2 billion Indian rupees ($518.5 million) in royalties to its Japanese parent Suzuki Motor 7269.T in the fiscal year ending March 31, 2020, amounting to 5% of its revenue, according to its annual report.

Privately-owned companies such as Toyota Motor's 7203.T India arm paid $88 million or 3.4% of revenue to its Japanese parent, government data shows. ($1 = 73.6700 Indian rupees)

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