Maruti to pay out royalty to Suzuki in rupees

Maruti to pay out royalty to Suzuki in rupees

Maruti Suzuki India (MSI) on Thursday said it would make all royalty payments on its future models to parent Suzuki Motor Corp in Indian rupees instead of Japanese yen. 

The step will insulate the company from fluctuations in the exchange rate and save the country from flight of scare foreign exchange.

“On all future models the royalty will be expressed in rupees and not in the yen so that we are not exposed to the variation in the exchange rate which has been happening in the past,” Maruti Chairman R C Bhargava told shareholders at the company’s annual general meeting .

Maruti pays royalty to Suzuki for the technical know-how and the use of its Japanese parent brand name. The royalties were until now being paid in yen. This made Maruti subject to variations in exchange rate.

The company paid close to Rs 2,500 crore worth of royalty to Suzuki last year. 

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