USAID/India program for the advancement of commercial technology, project no. 386-0496 : midterm evaluation -- second phase report

Interim evaluation covers the period 8/85-9/89. As of 9/20/89, the project had approved 18 joint ventures and two feasibility studies. Though most were running at least 6 months behind schedule, the joint ventures were well selected, involving companies that appear productive, committed to commercial technology development, and well managed. Eight joint ventures were reviewed in depth, representing four distinct models of technical collaboration between Indian and U.S. companies ranging from nearly equal involvement of U.S. and Indian companies to relatively limited and specific assistance by a U.S. company. Most of the projects seemed sound in terms of business plans and technical progress. Some had reached the point of test marketing products resulting from project-sponsored R&D, and several were seeking buyers for their products. However, several of the joint ventures were having significant difficulties in attaining commercialization, due to disputes over intellectual property transfer arrangements, problems in obtaining contracts or approval from buyers, production difficulties, poor communication between partners, difficulties in obtaining research equipment and supplies, etc. It is estimated that 25% of the projects will end without successful commercialization. At this point, no joint venture has sold a product developed under a PACT grant, although several are ready to begin marketing a product. It is therefore too early to determine the profitability of any of the joint ventures, or what the rate of payback to the PACT fund will be. The joint ventures have also given both U.S. and Indian companies chances to explore business opportunities, establish contacts, and acquire expertise they probably would not otherwise have had; there is also no doubt that PACT has increased the business activity of U.S. firms in India. The profitability of these and other such ventures will no doubt be an important factor determining the future of commercially oriented R&D in India.