Special Economic Zones in India: Suresh Kumar B30

Special Economic Zones in India
SURESH KUMAR B30
INTRODUCTION
India was one of the first in Asia to recognize the effectiveness of the Export Processing Zone (EPZ) model in promoting exports, with Asia's first EPZ set up in Kandla in 1965. With a view to overcome the shortcomings experienced on account of the multiplicity of controls and clearances; absence of world-class infrastructure, and an unstable fiscal regime and with a view to attract larger foreign investments in India, the Special Economic Zones (SEZs) Policy was announced in April 2000.
What are the SEZ

A Special Economic Zone (SEZ) is a geographical region that has economic and other laws that are more free-market-oriented than a country's typical or national laws. "Nationwide" laws may be suspended inside a special economic zone Free Trade Zones- (FTZ), Export Processing Zones-(EPZ) Free Zones- (FZ), Industrial parks or Industrial Estates- (IE) Free Ports Urban Enterprise Zones and others. Multi National Corporation (MNC).
All 8 EPZs converted into SEZs: Kandla ( Gujarat) Seepz( Maharashtra) Noida (U P) Madras ( T N) Cochin ( Kerala ) Falta ( W B) Visakhapatnam( AP) Surat ( Gujarat ) : 1965 (625 Acres) : 1975 (110 Acres) : 1986 (310 Acres) : 1986 (262 Acres) : 1986 (103 Acres) : 1986 (280 Acres) : 1994 (360 Acres) : 1998 (103 Acres)
Approval Committee
Every SEZ has one approval committee Approval Committee has 9 members Development commissioner is Chairperson of Approval Committee
Role of SEZ s In Indian Economy

To provide internationally competitive environment To increase share in global exports To encourage FDI and enhance GDP To Generate Employment opportunities
Main objectives of the SEZ Act

Generation of additional economic activity;
Promotion of exports of goods and services;

Promotion of investment from domestic and foreign sources; Creation of employment opportunities; Development of infrastructure facilities
Overview
SEZ are delineated duty-free enclaves treated as a foreign territory for the purpose of trade operations, Duties and tariffs Developed in the public, private or joint sectors, or by the State Governments or any person for manufacture of goods or rendering services or both or as a FTWZ Import / export operations of the SEZ units on selfcertification basis. SEZ units have to be a net foreign exchange earner
Feature of Indian SEZ

features of Indian Special Economic Zones: Indian SEZs are developed by government, private and joint sector, unlike its international counterparts where zones are chiefly maintained by their respective governments. This provides equal prospects to both Indian and global players.
Government has allocated a least favorable area of 1,000 hectares for greenfield SEZs. Although, there are no limitation in context of favorable area in constructing sector specific SEZs.
100% of Foreign Direct Investment is allowed for all endowments in Special Economic Zones, apart from activities cataloged under the unconstructive record.
SEZ divisions are obligatory to be encouraging net foreign exchange yielders and are not entitle to any least amount of value addition guidelines or export responsibilities.
Commodity surge from Domestic Tariff Area (DTA) into a SEZ is recognized as exports and commodity surge into DTA from SEZ are recognized as imports.
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Laws applicable to SEZ

Foreign trade (Development and Regulation) Act,1992 Foreign Exchange Management Act,1999 Special Economic Zones Act, 2005 Special Economic Zones Rules, 2006 An amendment has been made in the Special Economic Zones Rules by way of -The Special economic Zones (Amendment) Rules, 2006 which came into force on 10.08.2006
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Benefit of SEZ
Full Income tax exemption for a period of 5 years and an extra 50% tax relief for additional two years. Manufacturing industry is allowed an FDI influx of 100% via automatic channels excluding few industries. Services to establish off-shore banking divisions in SEZs Service Tax and Central Sales Tax exemption External commercial lending of upto US$500 million is allowed for SEZ divisions in a year sans any maturity limitations via certified banking networks. No import authorization obligations. Services to sustain foreign exchange proof of payments of upto 100% in Exchange Earners' Foreign Currency Account. SEZ franchisees are allowed100% FDI in offering customary telephone facilities in the areas. No limitation of foreign endowments for small scale industry reticent products. Tax relief from sectoral authorization obligations for goods reticent for SSI industry
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Indian SEZ-Organizational set-up

Supreme controlling body in the Department is known as The Board of Approval At district level, The Unit Approval Committee tackles with SEZs development and other associated issues Every district is led by a Development Commissioner, who also controls the Unit Approval Committee.
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Growth Rate of SEZ

Indias Cumulative Export Growth up 23.5 Per Cent During April 2011Jan 2012; Total Exports US $ 242.8 Billion Exports from SEZ 14.5 Per Cent at Rs. 2,60,973 Crore up to Dec 2011
Rajkumar S. Adukia
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THANK YOU
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Special Economic Zones in India: Suresh Kumar B30

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Special Economic Zones in India

SURESH KUMAR B30

What are the SEZ

Role of SEZ s In Indian Economy

Main objectives of the SEZ Act

Promotion of exports of goods and services;

Feature of Indian SEZ

Laws applicable to SEZ

Indian SEZ-Organizational set-up

Growth Rate of SEZ

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