A series of 'not-quite-in-agreement' meetings between the finance ministry and the ministry of commerce on royalty payment caps, and technical fees for multinational companies, ended up at the Prime Minister's doorstep.
The finance ministry earlier said companies should not have to seek prior approval for royalty payment repatriation. The commerce ministry, however, has been demanding a strict system of caps be imposed after reports that royalty repatriations to parent companies abroad were very high, especially from auto companies.
Finance ministry officials say a cap may deter investors, commerce ministry officials assert that the caps as suggested are within the framework agreed upon at WTO and will serve to curb forex outflow. Who the PMO finally sides withremains to be seen.