New Delhi: The Foreign Investment Promotion Board (FIPB) has accepted General Motors India's application for payment of both lump sum engineering fee and royalty to GM Daewoo Auto & Technology, Korea (GMDAT).

According to an official release, GM had made the application for payment of lump sum engineering fee to GMDAT amounting to $9.4 million (approximately Rs42.3 crore) over a period of three years and five per cent running royalty payment on each vehicle manufactured and sold by GM India with the technical know how given by GMDAT up to 2012.

The proposal had been deferred earlier as the department of heavy industry had said that it needed more time to examine it. The department, however, in a recent letter gave its nod for the proposal and stated that it would help in promoting healthy competition.

According to market watchers, GM's proposal is indicative of the company's plans to roll out new car models in the country from GMDAT's portfolio. Sources said GM India is planning to roll out the Chevrolet Aveo, which is based on the GMDAT Kalos platform, sometime next year. The vehicle is likely to be positioned in the premium compact segment, which has seen a spate of launches over the last few months.