Kolkata, July 30 (IANS): Asserting that the policy of limitless repatriation of royalty payments to overseas holding companies leads to an outflow of nearly Rs.40,000 crore ($6.6 billion), ITC Chairman Y.C. Deveshwar has called for a change in the royalty policy.
"It has been reported that since the policy change in 2009 such payouts have increased by 70 percent to reach nearly Rs.40,000 crore which is about 20 percent of India's annual FDI," Deveshwar said in his speech at the company's 103rd AGM here.
With consumption expenditure expected to grow from the current $1 trillion to $3.6 trillion in 2020, he said "such unrestrained" outflows can assume alarming proportions causing considerable injury to Indian companies.
"There is really no justification whatsoever to allow royalty, let alone limitless payouts by the Indian subsidiaries to their overseas holding companies," he said.
"Royalty payments should therefore be permitted only between unrelated parties based on purely commercial considerations with little or no governmental interventions.
"Such a policy framework will go a long way in creating a level playing field for Indian enterprises," he added.