Press Releases

PDF document (412 kb)
Date : Jan 28, 2019
Survey on Foreign Collaboration in Indian Industry: 2016–2018 – Data Release

Today, the Reserve Bank released the results of the twelfth round of the biennial survey on Foreign Collaboration in Indian Industry covering the financial years 2016-17 and 2017-18, on its website1.

Domestic efforts in building technological support for economic development are often supplemented by foreign technical collaboration, which is a frequent component in cross-border financial partnerships in corporate management. In India, foreign collaborations have a long history and the strengthening of the country’s integration with the global economy has resulted in an increase in such financial and technical alliances, often by setting up of cross-border subsidiaries.

Regular assessment of the dimensions and impact of technological collaboration on various aspects of economic development is useful for informing the setting of macroeconomic policies. Accordingly, the Reserve Bank has been conducting the survey on foreign collaboration in Indian industry since the 1960s, to gauge the nature of collaboration and to analyse its impact. After introduction of the mandatory census on foreign liabilities and assets (FLA) of Indian direct investment companies in 2011, this survey was restructured in 2012 to supplement the FLA census. It focuses on the major operational facets of the Indian companies that have technical collaboration agreements with foreign companies (survey schedule is attached).

Highlights:

I. Coverage: In the latest round of the survey, 877 Indian entities that responded, of which, 334 companies reported 620 foreign technical collaboration (FTC) agreements. Out of these 334 companies, 206 were foreign subsidiaries (single foreign investor holding majority equity) and 83 were foreign associates (foreign investors’ equity holding ranging between 10-50 per cent). Thus, an overwhelming majority of the FTC companies also had overseas financial collaboration. Only eight companies had pure technical collaborations (Table 1). Incidentally, 189 of the 334 FTC companies are common in relation to the previous survey round and 145 are new in the sample.

II. Industry-wise Agreements: Over 80 per cent of the reported FTC agreements were in the manufacturing sector where motor vehicles, machinery and other equipment, chemicals and chemical products had major share. Relative to the previous survey round, there is an increase in such agreement in the construction sector, the share of which in total output has been growing. The share of services sector in FTC agreements continues to be much lower than its share in the economy (Table 2).

III. Partner Country Profile: In terms of source country for technology transfer, Japan accounted for nearly a third of the FTC agreements followed by USA and Germany: these three partner countries together accounted for nearly 60 per cent of the reported FTC agreements. The UK, Italy, Republic of Korea and Switzerland were other major collaborators (Table 3).

IV. Asset transfer and Payment Mode: Nearly two-thirds of the FTC agreements involved know-how transfer by the foreign collaborator and another 11 per cent involved use of trade-marks / brand names (Table 4). Around half of the FTCs provided for royalty payment and some of them also had additional clauses for lump-sum technical fees. Only 16 per cent of the reported contracts were based on pure lump-sum technical fees payments (Table 5).

V. Export Restriction Clauses and Exclusive Rights Provisions: Export restriction clauses are typically written into FTCs by foreign collaborators intending to protect their own markets. On the other hand, local collaborators often obtain exclusive rights on assets transferred under the agreement so that the foreign collaborator is restrained from transferring such assets to another local party. At the aggregate level, around 32 per cent of reported FTC agreements had export restriction clauses and nearly 37 per cent had provision for exclusive rights on assets transferred under the agreements.

Over a third of the FTC agreements in the manufacturing sector had export restriction clauses whereas it was less than 10 per cent for the services sector. In the manufacturing sector, In the manufacturing sector, the export-intensive rubber and plastic, fabricated metal products, motor vehicles, machinery and equipment sectors had lower export restriction clauses. In case of Japan, which was the largest collaborator country, nearly 43 per cent of agreements had export restriction clauses (Tables 6, 7, 8 and 10).

VI. Value of Production: The total value of production of the FTC reporting companies in the sample increased by 13.8 per cent in 2017-18 to 5,317 billion, of which, nearly 80 per cent related to the manufacturing sector (Tables 9).

VII. Exports and Imports: Led by the manufacturing sector, exports and imports of FTC reporting companies increased by 10.5 per cent and 28.3 per cent, respectively, in 2017-18. At the aggregate level, the ratio of exports and imports to value of production stood at 13.8 per cent and 18.9 per cent, respectively, with large inter-sectoral variations. (Tables 10 and 11).

VIII. Profitability: The average profitability of FTC reporting companies, measured by the ratio of gross profit to capital employed, moderated when compared to the previous two survey rounds (Table 12).

Ajit Prasad
Assistant Adviser

Press Release : 2018-2019/1763


Table 1: Company Group-wise Number of Companies having Foreign Technical Collaboration
Company Group Number of Companies
Foreign Subsidiary 206
Foreign Associate 83
Pure Technical Collaboration 8
Others (Foreign Equity less than 10 per cent or only Outward investment) 37
Total 334

Table 2: Industry-Wise Distribution of Agreements of FTC Companies
Industry Eleventh Round
(2014-15 to 2015-16)
Twelfth Round
(2016-17 to 2017-18)
Number % of Total Number % of Total
A. Agriculture-related, Plantation and Allied Activities 22 3.7 7 1.1
B. Mining & Quarrying 1 0.2 1 0.2
C. Manufacturing 471 79.8 501 80.8
1. Food Products 13 2.2 7 1.1
2. Beverages and Tobacco products 0 0.0 1 0.2
3. Textiles 2 0.3 3 0.5
4. Wearing Apparel 0 0.0 2 0.3
5. Leather & Related Products 2 0.3 1 0.2
6. Wood & Products of Wood and Cork ; Except Furniture 0 0.0 0 0.0
7. Printing and Reproduction of Recorded Media 0 0.0 0 0.0
8. Coke and Refined Petroleum Products 4 0.7 2 0.3
9. Chemicals and Chemical Products 42 7.1 44 7.1
10. Pharmaceuticals, Medicinal Chemical and Botanical Products 27 4.6 31 5.0
11. Rubber and Plastics Products 11 1.9 12 1.9
12. Other Non-metallic Mineral Products 1 0.2 2 0.3
13. Fabricated metal Products; Except Machinery and Equipment 9 1.5 11 1.8
14. Computer, Electronic and Optical Products 6 1.0 4 0.6
15. Electrical Equipment 24 4.1 25 4.0
16. Machinery and Equipment N.E.C. 61 10.3 63 10.2
17. Motor vehicles, Trailers and Semi-Trailers 69 11.7 85 13.7
18. Other Transport Equipment 49 8.3 45 7.3
19. Other Manufacturing 151 25.6 163 26.3
D. Electricity, Gas, Steam and Air Conditioning Supply 0 0.0 0 0.0
E. Water Supply; Sewerage, Waste Management and Remediation activities 0 0.0 0 0.0
F. Construction 14 2.4 28 4.5
G. Services 82 13.9 83 13.4
1. Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles 1 0.2 8 1.3
2. Repair and Installation of Machinery and Equipment 6 1.0 8 1.3
3. Accommodation and Food Service Activities 5 0.8 9 1.5
4. Information and Communication 19 3.2 7 1.1
5. Financial and Insurance Activities 5 0.8 5 0.8
6. Real Estate Activities 0 0.0 0 0.0
7. Other Service Activities 46 7.8 46 7.4
Total 590 100.0 620 100.0
Note: The sum of the constituent items may not add to the total due to rounding off. (Also applicable to other tables)

Table 3: Country-wise Distribution of Agreements of FTC Companies
Country Eleventh Round
(2014-15 to 2015-16)
Twelfth Round
(2016-17 to 2017-18)
Number % of Total Number % of Total
Japan 200 33.9 203 32.7
USA 82 13.9 95 15.3
Germany 63 10.7 72 11.6
UK 30 5.1 39 6.3
Singapore 9 1.5 10 1.6
Italy 27 4.6 41 6.6
Republic of Korea 22 3.7 21 3.4
Switzerland 17 2.9 19 3.1
France 20 3.4 17 2.8
Others 120 20.3 103 16.6
Total 590 100.0 620 100.0

Table 4: Distribution of Agreements According to Type of Assets Transferred of FTC Companies
Asset transferred Eleventh Round
(2014-15 to 2015-16)
Twelfth Round
(2016-17 to 2017-18)
Number % of Total Number % of Total
Know-how 405 68.6 398 64.2
Trademark/ Brand Name 59 10.0 65 10.5
Patent 4 0.7 14 2.3
Others 122 20.7 143 23.0
Total 590 100.0 620 100.0

Table 5: Distribution of Agreements According to Mode of Payment of FTC Companies
Mode of Payment Eleventh Round
(2014-15 to 2015-16)
Twelfth Round
(2016-17 to 2017-18)
Number % of Total Number % of Total
Royalty 268 55.4 271 51.9
Lump Sum Technical Fees 67 13.8 78 15.0
Both Royalty and Lump-Sum Technical Fees 149 30.8 173 33.1
Total 484 100.0 522 100.0
* Of the 620 agreements, 522 agreements reported along with the specific mode of payment in the present survey.

Table 6: Industry-wise Agreements with Exports Restrictive Clauses of FTC Companies
Industry Eleventh Round
(2014-15 to 2015-16)
Twelfth Round
(2016-17 to 2017-18)
Total Number of Agreement Number of Agreements with Export Restrictive Clauses % of Agreements with Export Restrictive Clauses Total Number of Agreement Number of Agreements with Export Restrictive Clauses % of Agreements With Export Restrictive Clauses
A. Agriculture-related, Plantation and Allied Activities 22 2 4.5 7 1 14.3
B. Mining & Quarrying 1 0 0.0 1 0 0.0
C. Manufacturing 471 176 37.4 501 183 36.5
1. Food Products 13 3 23.1 7 2 28.6
2. Beverages & Tobacco Products 0 0 0.0 1 0 0.0
3. Textiles 2 0 0.0 3 1 33.3
4. Wearing Apparel 0 0 0.0 2 0 0.0
5. Leather & Related Products 2 1 50.0 1 1 100.0
6. Wood & Products of Wood and Cork, Except Furniture 0 0 0.0 0 0 0.0
7. Printing and Reproduction of Recorded Media 0 0 0.0 0 0 0.0
8. Coke and Refined Petroleum Products 4 0 0.0 2 0 0.0
9. Chemicals and Chemical Products 42 5 11.9 44 4 9.1
10. Pharmaceuticals, Medicinal Chemical & Botanical Products 27 18 66.7 31 18 58.1
11. Rubber and Plastics Products 11 3 27.3 12 4 33.3
12. Other Non-Metallic Mineral Products 1 0 0.0 2 0 0.0
13. Fabricated Metal Products, Ex. Machinery & Equipment 9 4 44.4 11 5 45.5
14. Computer, Electronic & Optical Products 6 1 16.7 4 1 25.0
15. Electrical Equipment 24 12 50.0 25 9 36.0
16. Machinery &Equipment N.E.C. 61 26 42.6 63 28 44.4
17. Motor Vehicles, Trailers & Semi-Trailers 69 19 27.5 85 23 27.1
18. Other Transport Equipment 49 28 57.1 45 17 37.8
19. Other Manufacturing 151 56 37.1 163 70 42.9
D. Electricity, gas, steam & Air Conditioning Supply 0 0 - 0 0 -
E. Water supply; sewerage, Waste Management and Remediation Activities 0 0 - 0 0 -
F. Construction 14 5 35.7 28 8 28.6
G. Services 82 7 8.5 83 6 7.2
1. Wholesale and retail trade; repair of motor vehicles and motorcycles 1 1 100.0 8 1 12.5
2. Repair and installation of machinery and equipment 6 1 16.7 8 0 0.0
3. Accommodation and Food service activities 5 0 0.0 9 0 0.0
4. Information and communication 19 1 5.3 7 1 14.3
5. Financial and insurance activities 5 1 20.0 5 1 20.0
6. Real estate activities 0 0 - 0 0 -
7. Other service activities 46 3 6.5 46 3 6.5
Total 590 190 32.0 620 198 31.9

Table 7: Country-Wise Distribution of Agreements with Exports Restrictive Clauses of FTC Companies
Country Eleventh Round
(2014-15 to 2015-16)
Twelfth Round
(2016-17 to 2017-18)
Total Number of Agreements Number of Agreements with Export restrictive clauses % of Agreements with Export restrictive clauses Total Number of Agreements Number of Agreements with Export restrictive clauses % of Agreements with Export restrictive clauses
Japan 200 89 44.5 203 87 42.9
USA 82 20 24.4 95 31 32.6
Germany 63 17 27.0 72 13 18.1
UK 30 9 30.0 39 14 35.9
Singapore 9 2 22.2 10 2 20.0
Italy 27 7 25.9 41 5 12.2
Republic Of Korea 22 2 9.1 21 2 9.5
Switzerland 17 9 52.9 19 9 47.4
France 20 5 25.0 17 4 23.5
Others 120 29 24.2 103 31 30.1
Total 590 189 32.0 620 198 31.9

Table-8: Industry-Wise Distribution of Agreements with Provision of Exclusive Rights of FTC Companies
Industry Eleventh Round Twelfth Round
(2014-15 to 2015-16) (2016-17 to 2017-18)
Number of Agreements with Exclusive Rights % of Total Number of Agreements Number of Agreements with Exclusive Rights % of Total Number of Agreements
A. Agriculture-related, Plantation and Allied Activities 14 63.6 7 100.0
B. Mining & Quarrying 0 0.0 0 0.0
C. Manufacturing 173 36.7 196 39.1
1. Food Products 7 53.8 5 71.4
2. Beverages & Tobacco Products 0 - 0 0.0
3. Textiles 2 100.0 2 66.7
4. Wearing Apparel 0 - 2 100.0
5. Leather & Related Products 1 50.0 1 100.0
6. Wood & Products of Wood and Cork, Except Furniture 0 - 0 -
7. Printing and Reproduction of Recorded Media 0 - 0 -
8. Coke and Refined Petroleum Products 1 25.0 2 100.0
9. Chemicals and Chemical Products 12 28.6 8 18.2
10. Pharmaceuticals, Medicinal Chemical & Botanical Products 20 74.1 22 71.0
11. Rubber and Plastics Products 5 45.5 6 50.0
12. Other Non-Metallic Mineral Products 1 100.0 0 0.0
13. Fabricated Metal Products, Ex. Machinery & Equipment 2 22.2 3 27.3
14. Computer, Electronic & Optical Products 2 33.3 3 75.0
15. Electrical Equipment 7 29.2 11 44.0
16. Machinery &Equipment N.E.C. 26 42.6 30 47.6
17. Motor Vehicles, Trailers & Semi-Trailers 25 36.2 30 35.3
18. Other Transport Equipment 13 26.5 14 31.1
19. Other Manufacturing 49 32.5 57 35.0
D. Electricity, gas, steam & Air Conditioning Supply 0 - 0 -
E. Water Supply; Sewerage, Waste Management and Remediation Activities 0 - 0 -
F. Construction 5 35.7 6 21.4
G. Services 20 24.4 23 27.7
1. Wholesale and retail trade; repair of motor vehicles and motorcycles 1 100.0 4 50.0
2. Repair and installation of machinery and equipment 2 33.3 0 0.0
3. Accommodation and Food service activities 0 0.0 5 55.6
4. Information and communication 8 42.1 1 14.3
5. Financial and insurance activities 0 0.0 1 20.0
6. Real estate activities 0 - 0 -
7. Other service activities 9 19.6 12 26.1
Total 212 35.9 232 37.4

Table-9: Industry-Wise Share in Value of Production of FTC Companies
(₹ billion)
Industry Value of Production Annual Growth
(per cent)
Share in VoP
(2017-18)
2016-17 2017-18
A. Agriculture-related, Plantation and Allied Activities 7.8 9.2 17.9 0.2
B. Mining & Quarrying 0.0 0.0 - 0.0
C. Manufacturing 3711.9 4218.6 13.7 79.3
1. Food Products 41.2 41.9 1.7 0.8
2. Beverages & Tobacco Products 44.0 28.8 -34.5 0.5
3. Textiles 1.7 2.0 17.6 0.0
4. Wearing Apparel 2.3 2.1 -8.7 0.0
5. Leather & Related Products 2.4 2.1 -12.5 0.0
6. Wood & Products of Wood and Cork ; Except Furniture 0.0 0.0 - 0.0
7. Printing and Reproduction of Recorded Media 0.0 0.0 - 0.0
8. Coke and Refined Petroleum Products 5.9 7.0 18.6 0.1
9. Chemicals and Chemical Products 194.1 216.5 11.5 4.1
10. Pharmaceuticals, Medicinal Chemical and Botanical Products 34.7 33.4 -3.7 0.6
11. Rubber and Plastics Products 18.3 20.6 12.6 0.4
12. Other Non-Metallic Mineral Products 20.9 18.9 -9.6 0.4
13. Fabricated Metal Products; Except Machinery & Equipment 247.8 344.0 38.8 6.5
14. Computer, Electronic & Optical Products 24.3 25.6 5.3 0.5
15. Electrical Equipment 104.7 128.1 22.3 2.4
16. Machinery & Equipment N.E.C. 403.1 539.2 33.8 10.1
17. Motor Vehicles, Trailers & Semi-Trailers 1688.1 1808.9 7.2 34.0
18. Other Transport Equipment 72.3 120.7 66.9 2.3
19. Other Manufacturing 806.2 878.7 9.0 16.5
D. Electricity, Gas, Steam and Air Conditioning Supply 0.0 0.0 - 0.0
E. Water supply; Sewerage, Waste Management and Remediation Activities 0.0 0.0 - 0.0
F. Construction 672.5 756.9 12.6 14.2
G. Services 278.1 332.1 19.4 6.2
1. Wholesale and retail trade; repair of motor vehicles and motorcycles 14.0 16.3 16.4 0.3
2. Repair and installation of machinery and equipment 1.8 1.9 5.6 0.0
3. Accommodation and Food service activities 30.2 35.7 18.2 0.7
4. Information and communication 124.0 152.4 22.9 2.9
5. Financial and insurance activities 7.8 9.6 23.1 0.2
6. Real estate activities 0.0 0.0 - 0.0
7. Other service activities 100.4 116.3 15.8 2.2
Total 4670.2 5316.8 13.8 100.0

Table 10: Industry-Wise Distribution of Exports of FTC Companies
(₹ billion)
Industry Export Annual Growth Share in Export
2016-17 2017-18 (per cent) (2017-18)
A. Agriculture-related, Plantation and Allied Activities 0.2 0.3 50.0 0.0
B. Mining & Quarrying 0.0 0.0 - 0
C. Manufacturing 459.2 500.1 8.9 67.9
1. Food Products 0.5 0.7 40.0 0.1
2. Beverages & Tobacco Products 2.9 1.3 -55.2 0.2
3. Textiles 0.3 0.6 100.0 0.1
4. Wearing Apparel 1.4 1.1 -21.4 0.2
5. Leather & Related Products 0.0 0.0 - -
6. Wood & Products of Wood and Cork ; Except Furniture 0.0 0.0 - -
7. Printing and Reproduction of Recorded Media 0.0 0.0 - -
8. Coke and Refined Petroleum Products 0.0 0.0 - -
9. Chemicals and Chemical Products 33.7 38.4 13.9 5.2
10. Pharmaceuticals, Medicinal Chemical and Botanical Products 15.8 15.9 0.6 2.2
11. Rubber and Plastics Products 0.9 0.7 -22.2 0.1
12. Other Non-Metallic Mineral Products 1.2 0.2 - 0.0
13. Fabricated Metal Products; Except Machinery & Equipment 0.5 0.8 60.0 0.1
14. Computer, Electronic & Optical Products 12.3 12.3 0.0 1.7
15. Electrical Equipment 29.4 41.4 40.8 5.6
16. Machinery &Equipment N.E.C. 98.2 103.6 5.5 14.1
17. Motor Vehicles, Trailers & Semi-Trailers 186.1 200.3 7.6 27.2
18. Other Transport Equipment 14.0 15.6 11.4 2.1
19. Other Manufacturing 62.1 67.3 8.4 9.1
D. Electricity, Gas, Steam and Air Conditioning Supply 0.0 0.0 - -
E. Water Supply; Sewerage, Waste Management and Remediation Activities 0.0 0.0 - -
F. Construction 145.5 162.0 11.3 22.0
G. Services 61.7 73.8 19.6 10.0
1. Wholesale and retail trade; repair of motor vehicles and motorcycles 1.2 1.1 -8.3 0.1
2. Repair and installation of machinery and equipment 0.2 0.2 0.0 0.0
3. Accommodation and Food service activities 0.4 0.5 25.0 0.1
4. Information and communication 44.5 53.9 21.1 7.3
5. Financial and insurance activities 0.0 0.0 - -
6. Real estate activities 0.0 0.0 - -
7. Other service activities 15.5 18.1 16.8 2.5
Total 666.6 736.3 10.5 100.0

Table-11 Industry-Wise Distribution of Imports of FTC Companies
(₹ billion)
Industry Import Annual Growth
(per cent)
Share in Import
(2017-18)
2016-17 2017-18
A. Agriculture-related, Plantation and Allied Activities 0.4 0.4 0 0.0
B. Mining & Quarrying 0.0 0.0 - -
C. Manufacturing 711.2 907.6 27.6 90.3
1. Food Products 1.7 2.0 17.6 0.2
2. Beverages & Tobacco Products 0.5 0.6 20.0 0.1
3. Textiles 0.3 0.7 133.3 0.1
4. Wearing Apparel 1.0 0.8 -20.0 0.1
5. Leather & Related Products 0.2 0.2 0.0 0.0
6. Wood & Products of Wood and Cork ; Except Furniture 0.0 0.0 - -
7. Printing and Reproduction of Recorded Media 0.0 0.0 - -
8. Coke and Refined Petroleum Products 52.3 85.1 62.7 8.5
9. Chemicals and Chemical Products 50.4 57.5 14.1 5.7
10. Pharmaceuticals, Medicinal Chemical and Botanical Products 9.0 9.0 0.0 0.9
11. Rubber and Plastics Products 2.4 2.6 8.3 0.3
12. Other Non-Metallic Mineral Products 1.9 1.6 -15.8 0.2
13. Fabricated Metal Products; Except Machinery & Equipment 220.5 328.2 48.8 32.7
14. Computer, Electronic & Optical Products 10.2 11.7 14.7 1.2
15. Electrical Equipment 25.6 28.5 11.3 2.8
16. Machinery &Equipment N.E.C. 35.6 44.8 25.8 4.5
17. Motor Vehicles, Trailers & Semi-Trailers 173.2 186.4 7.6 18.6
18. Other Transport Equipment 14.3 19.2 34.3 1.9
19. Other Manufacturing 112.0 128.7 14.9 12.8
D. Electricity, Gas, Steam and Air Conditioning Supply 0.0 0.0 - -
E. Water Supply; Sewerage, Waste Management and Remediation Activities 0.0 0.0 - -
F. Construction 26.6 28.0 5.3 2.8
G. Services 44.6 68.8 54.3 6.8
1. Wholesale and retail trade; repair of motor vehicles and motorcycles 0.5 0.4 -20.0 0.0
2. Repair and installation of machinery and equipment 0.2 0.1 -50.0 0.0
3. Accommodation and Food service activities 0.3 0.3 0.0 0.0
4. Information and communication 39.1 63.4 62.1 6.3
5. Financial and insurance activities 0.6 0.6 0.0 0.1
6. Real estate activities 0.0 0.0 - -
7. Other service activities 4.0 4.0 0 0.4
Total 782.9 1004.8 28.3 100.0

Table 12: Profitability Ratio of FTC Companies
(per cent)
Survey Round Year Gross Profit to Capital Survey Average
Ninth round (244) 2010-11 9.8 10.0
2011-12 10.1
Tenth round (303) 2012-13 17.0 14.8
2013-14 12.6
Eleventh round (306) 2014-15 17.3 18.0
2015-16 18.5
Twelfth round (334) 2016-17 14.6 16.0
2017-18 17.4
Note: Figures in parentheses indicate the number of FTC companies

1 The results of the eleventh round of the Survey on Foreign Collaboration in Indian Industry for the period 2014-16 were released on the RBI website on March 22, 2017.


2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
Archives
Server 214
Top