1. WHAT IS A SEZ ?

 The concept of SEZ is expected to bring large

dividends to the State in terms of economic and industrial development
and the generation of new employment opportunities.  The SEZs are
expected to be engines for economic growth.  Special Economic Zone
(SEZ) is defined as "a specifically delineated duty free enclave and shall
be deemed to be foreign territory for the purposes of trade operations
and duties and tariffs".
2. 3. SEZ: A BRIEF REVIEW It covers a broad range of more specific zones
including :• • • • • • Free Trade Zones (FTZ) Export Processing Zones
(EPZ) Free Zones (FZ) Industrial Estates (IE) Free Ports (FP) Urban
Enterprise Zones and others
3. 4. History of Free Trade Zones • First Free Trade Zone in the world had
started on 1st January 1965 at Kandla Port , Kutch, India. • By 1978
India had another four free trade zones at Mumbai , Chennai , Noida and
Falta. • In 1978 China had gone through major economic make over and
they had realized power in concept of Free Trade Zone’s.
4. 5. Cont.. • First Chinese Free Trade Zone became operational in 1984 –
Shenzhen • In year 2000 one zone of Shenzhen was Exporting thrice of
India. • As on today there are about 2000 operation free trade zones
spread over 150 countries in world
5. 6. Kinds of SEZ
6. 7. Fundamentals of SEZs  SEZs (special economic zones) are
fundamentally different from the traditional free zones.  They are
much larger in size; offer broader range of activities such as  a single-
window management,  streamlined procedures,  duty-free
privileges,  also access to the domestic market on a dutypaid basis.
7. 8. Cont..  Whether the enclave is termed an EPZ, FTZ or SEZ, the
cardinal factors are  appropriate infrastructure and transport
facilities,  low factor cost,  flexible labour laws,  convertibility of
currency,  stable legal and administrative regime, and  a
commitment to the canons of an open economy
8. 9. OBJECTIVES OF 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
9. 10. ROLE OF SEZ IN INDIAN ECONOMY • To provide internationally
competitive environment • To encourage FDI and enhance GDP • To
 increase share in global exports  SEZ exports accounting for 26% of
India’s total export in 2011.
10. 11. SALIENT FEATURES OF SEZ • Self certification for export and
import  Import and export movements of goods are based on self
declaration  No routine examination is made unless specific order
from Development Commissioner or authority. • Sub contracting  A
SEZ unit may sub contract a part of it’s product or production process to
different units, even in abroad.
11. 12. • Fiscal incentives-Tax  Exemption from excise and
customers duty on procurement of capital assets, consumable stores,
rawmaterials from domestic market  Exemption from sales tax, import
duty, Income tax, minimum alternative tax and dividend distribution tax
• Single Window Clearance  Submit regularity documents at single
locations  Less proceedings and save time
12. 13. SOME OF IMPORTANT SEZ IN INDIA  INDIA • Karnataka
Biotechnology and Information Technology Services - SEZ on
biotechnology sector in Bangalore's Electronics City, over an area of 43
acres • Shree Renuka Sugars Limited - SEZ on sugarcane processing
complex covering 100 hectares, comprising a sugar plant, power station
and distillery, at Burlatti in Belgaum district
13. 14. Ittina Properties Private Limited and three other - SEZs in IT
sector, covering electronics, hardware and software sectors in
Bangalore, over an area of 15.732 hectares  Wipro Infotech - SEZ on IT
/ ITES at Electronics City, Sarajpur Bangalore  Hewlett Packard India
Software Operation Pvt. Ltd. SEZ on IT
14. 15. • Food processing and related SEZ services in Hassan, over an
area of 157.91 hectares • SEZs on pharmaceuticals, biotechnology and
chemical sectors in Hassan, covering of 281.21 hectares • • • • • • •
SEEPZ - Andheri (East), Mumbai Khopata - Multi-product, Mumbai Navi
Mumbai - Multi-product, Mumbai Salt Lake Electronic City, West Bengal
Manikanchan - Jems and jewelery, West Bengal Calcutta Leather
Complex, West Bengal Falta food processing unit, West Bengal
15. 16. Area Allocation in terms of use.
16. 17. Area Requirements
17. 18. Entities in SEZ
18. 19. Sectoral Focus
19. 20. ADVANTAGES OF SEZ • Growth and development • Attracts
Foreign Direct Investment • Exposure to technology and global market •
 Increasing GDP and Economic Model • Employment opportunities are
created
20. 21. DISADVANTAGES OF SEZ • Land acquisition at very low prices
• Farmers loose their livelihood • Tax holidays affect GDP
21. 22. Benefits & Incentives for SEZ Units
22. 23. Benefits & Incentives for SEZ Units
23. 24. SEZ Policy of 2000  New Policy in April 2000. SEZs permitted
to be set up in the public, private, joint sector or by the State
Governments  Minimum size of 1000 hectares (4 sq. miles) 
Simplified procedures and more incentives
24. 25.  Main measures were:  Conditions for automatic approval
relaxed considerably  Customs procedures simplified  Units could
produce items reserved for SSI units in domestic market  100% FDI
investment for manufacturing  Profits could be repatriated fully 
Freedom for sub-contracting  100% I.T. exemption for five years 
Exemption from Central Excise Duty on capital goods, raw materials,
consumable spares from domestic market  Reimbursement of CST
paid on domestic purchases
25. 26. Positive Impacts • To Nation – World class business
environment – Increased FDI – Higher economic growth –
Infrastructural development – Export growth – Employment
Opportunities – Exposure to technology and global markets
26. 27. Positive Impacts • TO Business houses – Hassle free operating
environment – Single window clearance – Simplified procedure for
setting up business, compliance proc with with self certification – Duty
free import – Tax exemption- VAT, CST, ST, other levies – External
commercial borrowings – 100% profit reptriation from export earnings
27. 28. Positive Impacts • To People – Employment opportunities –
Impact on lifestyle and standard of living – Business infrastructure
combined with social facilities – Better work culture , good education,
leadership vision
28. 29. Hurdles • To Nation – Loss of revenue • To Business – Land
acquisition – Single window actually is not – No strategic planning for
electicity, water
29. 30. Hurdles • To People – Grabbing of fertile land – Water
scarcity- Threat to access – Food scarcity – Exploitation of labour –
Landless farmers • To Environment  Mangrove destruction 
Destruction of ground water recharge system  Pollution
30. 31. SWOT ANALYSIS OF INDIAN SEZ  STRENGTH • Based on
Western model or SEZ in China • An established legal redress system •
Relatively low labour costs • Employment opportunities • India’s large
English speaking and skilled workforce • Exposure to technology and
global market
31. 32. • Worldwide acceptance of capabilities in fields like • • • • • •
Pharmaceutical manufacturing & research Clinical trials Manufacturing
auto parts Engineering designing & consultancy, IT & ITES Malls and
hotels Hospital • Financial & other institutional Networks like Insurance
Companies
32. 33.  WEAKNESS • Poor infrastructure and transport facilities •
High cost of capital • Inadequate institutional support • Political
changes • Inappropriate locations
33. 34.  OPPORTUNITIES • An alternative manufacturing base,
particularly compared to Chinese SEZs • Investments in core strength
areas like IT and software products and services. • New small ports &
airports are also being developed keeping SEZ concept in mind • A large
NRI base who have traditionally invested less in Greenfield
development in India
34. 35.  THREATS • The pattern of buying & selling may not
continue. With relocations of industries in other third world countries,
new competitors will emerge • opposing interests • Prospect of even
more restrictive labour laws being introduced • Increasing rejection
rate for proposals to establish SEZs