New Delhi, Dec 10: Foreign Investment Promotion Board (FIPB) has rejected a proposal of Nestle India for extending royalty payment period to 2007 from 2001 on domestic sales and export of sugar confectionary, pickles and chutney.

“The approval relating to regularisation of royalty payment of 3.5 per cent for domestic sales and 5 per cent on exports was given in favour of Nestle India for manufacture of instant foods, dairy whiteners, milk and milk products and did not relate to the newly included items - sugar confectionary, pickles and chutneys”, FIPB said.

“No royalty has been approved by FIPB for these products for their outsourcing from SSIs”, it said.

The company had earlier obtained the permission of Reserve Bank of India for many of its technical agreements for products like sugar confectionary, cocoa products and sauces with its parent Nestle SA under the automatic route .

The latest FIPB view on the same said “as regards RBI approvals for cocoa products and sugar confectionary and sauces, they were prior to and independent of FIPB approvals for subcontracting, manufacture of these items to independent SSI manufacturers”.

Fipb had earlier approved the proposal on the condition that the Nestle India would not directly manufacture these items and would source them from ssIs.

It had only okayed regularisation of royalty payment up to November 26, from February 17, 00 in respect of dairy whiteners and milk products. (PTI)