RBI Survey Reveals Robust Exports and Rising Profitability in Foreign Technical Collaborations
SDG 9: Industry, Innovation, and Infrastructure | SDG 17: Partnerships for the Goals
Reserve Bank of India (RBI) | Ministry of Commerce & Industry
The Reserve Bank of India (RBI) released the results of its fifteenth biennial Survey on Foreign Collaboration in Indian Industry (FCS), covering the financial years 2023-24 and 2024-25. The survey captured 601 Foreign Technical Collaboration (FTC) agreements reported by 255 Indian entities.
Key Findings on Structure and Profitability:
Dominance by FDI Companies: FTC agreements were primarily concentrated in Foreign Direct Investment (FDI) companies, specifically:
Foreign Subsidiaries (single foreign investor holding >50% equity): 68% share of total FTCs.
Foreign Associate Companies (10% to 50% foreign equity): 21% share of total FTCs.
Profitability: Average profitability of FTC companies, measured by the ratio of gross profit to capital employed, stood at 14.4% during the current survey round.
Top Collaborators: Japan, the USA, and Germany remained the top three source countries for technical collaborations in Indian entities.
An Foreign Technical Collaboration (FTC), as defined by the RBI survey, is an agreement between an Indian company and a foreign company for the transfer of technology, including know-how, the right to use trademarks/brand names, or patents. For two-thirds of the reported FTCs, the payment mode involved royalty payments (inclusive of lump sum technical fees).
Sectoral Focus and Trade Trends (FY 2024-25):
Sectoral Focus: The Manufacturing sector accounted for the vast majority of FTCs (78.4%), with machinery and motor vehicles together comprising 30.6%. The Services sector constituted 16.6%.
Trade Performance: The exports of FTC reporting entities grew at a faster pace (20.3%) compared to their imports (4.6%).
Restrictive Clauses: Of the 601 reported FTC agreements:
187 agreements (31.1%) included export restriction clauses.
188 agreements (31.3%) included provisions for exclusive rights on assets transferred. The prevalence of export restriction clauses was highest in agreements originating from Japan (52.4%).
Policy Relevance
The RBIβs findings are of high institutional and regulatory relevance, confirming that foreign technical collaboration remains highly concentrated in the manufacturing sector and is successfully fueling export growth (20.3%). The sustained presence of export restriction clauses in nearly one-third of agreements (31.1%) requires close monitoring by the Ministry of Commerce & Industry and the RBI, as these clauses may limit the full potential of Indian firms to integrate globally and contribute to the Make in India and export promotion objectives.
Follow the full news here: Survey on Foreign Collaboration in Indian Industry: 2023β2025