Special Economic Zones (SEZs) in India

Special Economic Zones (SEZs) in India

Why in the News?

The Parliamentary Standing committee on Commerce has flagged that the five SEZs approved in the Northeast India between 2007-21 have not started the operations yet.

The SEZs approved in the Northeast India and not yet operational:

1. Information Technology SEZs approved in Manipur and Sikkim in 2013 and 2021 respectively.
2. SEZ in Nagaland approved in 2007-09
3. Agro-products zone in Tripura approved in 2019.

What are SEZs?

1. Special Economic Zones are geographical zones characterised by distinct trade and business regulations that are unique compared to the rest of the country.
2. The economic laws will be more liberal compared to the country's domestic economic laws.
3. The specific zone types of SEZ includes:
   1. Free Trade Zones (FTZs)
   2. Export Processing Zones (EPZs)
   3. Free Zones (FZs)
   4. Industrial Estates (IEs)
   5. Free ports
   6. Urban enterprise zones

SEZs in India:

Govt. policies for promotion of SEZs in India:

1. India’s SEZ policy
   1. Inaugurated on April 1, 2000
   2. Aimed towards increasing foreign investments and creating a globally competitive environment for exports.
   3. It provides for a comprehensive legal framework for SEZ development and operation.
2. The SEZ Act of 2005
   1. A designated duty-free zone to be treated as a territory outside the customs territory of India for the purpose of authorised operations in the SEZ.
   2. Requires No license for import.
   3. Both Manufacturing or service activities are allowed.
   4. Domestic sales subject to full customs duty and import policy in force.
   5. SEZ units will have the freedom for subcontracting to other enterprises.
   6. No routine examination by customs authorities of export/import cargo that shall reduces the procedural complexities involved.
   7. SEZ Developers enjoy Direct Tax and Indirect Tax benefits as prescribed in the SEZs Act, 2005.
3. Incentives offered to SEZs:

Advantages of SEZs:

1. Generation of employment opportunities
2. Creation of Economic enclave to cater overseas market
3. Significant Foreign Exchange Earnings through exports
4. Development of world class infrastructure facilities
5. It also enables building capabilities of the local workforce as outside investors share expertise, technology and know-how.

Source URL: North-east SEZs yet to start operations - The Hindu