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July 4, 1990

BRITISH TECHNOLOGY GROUP INVADES BOMBAY TO HELP INDIA EXPLOIT INDIGENOUS TECHNOLOGY

By CBR Staff Writer

India’s first private sector technology development and transfer company is being set up to encourage the worldwide export of Indian technological products, as well as the import of global technology into the country. The transfer company is a joint venture between the British Technology Group and Bombay-based venture capitalists, Creditcapital Finance Corporation. British Technology Group, successor to the National Research & Development Corp and the National Enterprise Board, is owned by the UK Department of Trade & Industry, but it is now required to be self-financing. It identifies promising technology, in Britain and abroad, patents it and where necessary provides further technical or financial support to develop the idea ready for market. It then licenses the technology worldwide and as owners of the patents, earns royalties on sales. This process will be applied to Indian firms and individuals that have promising technological ideas but need extra financial or technical help to get a product off the ground, especially for international sales. Technical help will range from sending out developers and inventors to simply sending information such as engineering drawings. The group will introduce all types of technology from the 7,000 patents that it owns. In the computer area, British Technology has more software than hardware patents, although the precise breakdown was not given. Unfortunately it is the hardware that India particularly needs it already exports software systems worldwide. Rusi Kathoke, financial director of the British Technology Group reckons that the Indians import second rate technology because they lack the technical knowledge to assess it properly but also because computer companies in developed countries are not fully addressing the Indian market. Kathoke believes that the market has great potential, but is avoided by firms that perceive Indian buyers to be lacking in credibility – which British Technology and Creditcapital can provide, therefore enabling Indian industry to take advantage of that technology and become more competitive. However, although Kathoke rejected the idea that firms do not go to India because the Indians simply do not have the necessary hard currency to buy the hardware, he admitted that the Indian government’s desire not to pay royalties on products, and its restrictive licensing terms were other reasons for the reluctance of foreign technology firms to become involved in that market. Royalties are paid in India only for an initial period of 10 years after, which the time period may be extended by the government, but this is not secured. In other countries, royalties are generally paid for 20 years. British Technology’s Tony Chrismas says the 10 year limit is still quite a long time and anyway, several patents can be introduced on one piece of technology, to extend the life of its patent. The venture company, formally set up last week in Bombay, has four projects under way.

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