Japanese auto giant Honda Motor Co on Monday said India must remove the ceiling on new model introduction fees and royalty that a parent company charges from its Indian subsidiaries or joint venture to facilitate technology transfer."Honda is committed to increase localisation levels of products produced in India and technology transfer. For this we need abolition of ceiling limits imposed on initial model introduction fees and royalty," Honda Motor Co chairman Satoshi Aoki said in New Delhi.
He said then the parent company would be encouraged to transfer technology to its subsidiaries if such a ceiling was removed.
"We invest billions of dollars in Honda Japan and there must be a way of recovering it from overseas subsidiaries and partners," he added.
Aoki said ideally the Indian government should step out of deciding matters on new model introduction fees and royalty payments.
As per government norms, at present a new model introduction fee for car is 1,00,000 dollars, while royalty payment is five per cent of domestic sales and eight per cent of exports.
"It should be decided by the two partners (parent company and the subsidiary) and not by the government," he said, adding that the company's demand was for both of its two- wheeler and four-wheeler businesses.
He said this was a common practice in most of the countries, although China still has restrictions imposed by the government.
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