Call Us Now

+91 9606900005 / 04

For Enquiry

Centre to soon free up untapped space in SEZs


The government will soon free up unused built-up area worth about ₹30,000 crore and idle land inside Special Economic Zones (SEZs) for other economic activity according to the Commerce Secretary.


GS-III: Indian Economy (Growth and Development of Indian Economy, Government Policies and Interventions)

Dimensions of the Article:

  1. Special Economic Zones (SEZ)
  2. Special Economic Zones (SEZ) in India
  3. About the recent vision of the Government with respect to SEZs

Special Economic Zones (SEZ)

  • Special Economic Zones (SEZ) is a territory within a country that is typically duty-free (Fiscal Concession) and has different business and commercial laws chiefly to encourage investment and create employment.
  • SEZs are created also to better administer these areas, thereby increasing the ease of doing business.

Special Economic Zones (SEZ) in India

  • The Indian government began to establish SEZs in India during the 2000s under the Foreign Trade Policy to redress the infrastructural and bureaucratic challenges that were seen to have limited the success of EPZs.
  • Asia’s first EPZ (Export Processing Zones) was established in 1965 at Kandla, Gujarat and these EPZs had a similar structure to SEZs.
  • The Special Economic Zones Act was passed in 2005 and with this India’s SEZs were structured closely with China’s successful model.
  • More than 350 SEZs are notified in India, out of which 265 are operational.
  • About 64% of the SEZs are located in five states – Tamil Nadu, Telangana, Karnataka, Andhra Pradesh and Maharashtra.
  • The Baba Kalyani led committee was constituted by the Ministry of Commerce and Industry to study the existing SEZ policy of India and had submitted its recommendations in 2018.

Major Incentives and Facilities Available to SEZ

  • Duty free import/domestic procurement of goods for development, operation and maintenance of SEZ units.
  • Exemption from various taxes like Income Tax, minimum alternate tax, etc.
  • External commercial borrowing by SEZ units upto US $ 500 million in a year without any maturity restriction through recognized banking channels.
  • Single window clearance for Central and State level approvals.

Impact of having SEZs notified so far

SEZs were operational in India from 2000 to 2006 (under the Foreign Trade Policy) and since then:

  • Exports of around Rs. 22,000 Crore (2005-06) has increased to almost Rs. 8,00,000 Crore (2020-21).
  • Investment of Rs. 4,000 Crore (2005-06) has increased to more than Rs. 6,00,000 Crore (2020-21).
  • Employment from just over 1,30,000 persons (2005-06) has increased to more than 23,00,000 persons (2020-21).

About the recent vision of the Government with respect to SEZs

  • The government will soon free up unused built-up area and idle land inside Special Economic Zones (SEZs) for other economic activity.
  • The move to free up unutilised land parcels is likely to be operationalised by the end of August, as part of a simpler regulatory regime that the government is ringing in for SEZs, which account for about 30% of India’s exports.
  • The ministry has also kicked off a restructuring exercise for the Directorate General of Foreign Trade according to some reports.
  • The government will remit about ₹50,000 crore of pending export benefits over a two-year period and notify the RoDTEP scheme rates awaited by exporters.

-Source: The Hindu

May 2024