Royalties hit 16-year low in FY25 amid regulatory heat

Companies may have cut back on royalty payments amid increased regulatory scrutiny and an institutional pushback in 2024-25 (FY25).

- SACHIN P MAMPATTA

Royalties and technical knowhow payouts relative to the value of goods produced have fallen to their lowest since FY10, shows the data from the Centre for Monitoring Indian Economy (CMIE).

The value of such payouts was 0.43 per cent of sales and changes in stock in FY25 compared to 0.88 per cent in FY24. Fees for technical knowhow are for expertise passed on from parent to a group company, but some entities make such payouts under "royalty".

Both have been taken together here to give a broad sense of payout for support from parent companies.