Industry for sunset clause in PN 18

NEW DELHI: The Federation of Indian Chambers of Commerce and Industry has asked the government to include ‘sunset’ and ‘conflict of interest’ clauses in the proposed amendment to Press Note 18.

It has also asked for cooling-off period of five years so that the Indian joint venture partner “is not left in lurch if the foreign company chooses to enter the same or allied business.�

According to the chamber, a five-year cooling off period would give the Indian partner in the joint venture “reasonable time to recoup and re-position itself.�

Ficci also suggested that Indian industry use templates in joint-venture agreements, drafted in the US, which include a ‘conflict of interest’ clause defined by a cooling-off period that prevents “the technology provider from rocking the boat and leaving the technology receiving company in difficulties. Such JV agreements inevitably provide for a cooling-off period, even after parting ways in an orderly manner, so that the brand name created by the JV cannot be instantaneously exploited by the newly formed company.�