free trade zone (FTZ) or export processing zone (EPZ) is an area of a country where some normal trade

barriers such as tariffs and quotas are eliminated and bureaucratic requirements are lowered in hopes of

attracting new business and foreign investments.[1] It is a region where a group of countries has agreed to reduce

or eliminate trade barriers.[2] Free trade zones can be defined aslabor intensive manufacturing centers that

involve the import of raw materials or components and the export of factory products.

Most FTZs are located in developing countries: Brazil, Indonesia, El Salvador, China,

the Philippines, Malaysia, Bangladesh, Pakistan, Mexico, Costa Rica, Honduras, Guatemala, Kenya,

andMadagascar have EPZ programs.[3] In 1997, 93 countries had set up export processing zones (EPZs)

employing 22.5 million people, and five years later, in 2003, EPZs in 116 countries employed 43 million people.[3]

Corporations setting up in a zone may be given tax breaks as an incentive. Usually, these zones are set up in

underdeveloped parts of the host country; the rationale is that the zones will attract employers and thus reduce

poverty and unemployment, and stimulate the area's economy. These zones are often used by multinational

corporations to set up factories to produce goods (such as clothing or shoes).

Free trade zones in Latin America date back to the early decades of the 20th century. The first free trade

regulations in this region were enacted in Argentina and Uruguay in the 1920s. The Latin American Free Trade

Association (LAFTA) was created in the 1960 Treaty of Montevideo

by Argentina, Brazil, Chile, Mexico, Paraguay, Peru, and Uruguay. However, the rapid development of free trade

zones across the region dates from the late 1960s and the early 1970s. Latin American Integration Association is

a Latin American trade integration association, based in Montevideo.

Free Trade Zones are also known as Special Economic Zones in some countries. Special Economic

Zones (SEZs) have been established in many countries as testing grounds for the implementation of liberal

market economy principles. SEZs are viewed as instruments to enhance the acceptability and the credibility of
the transformation policies and to attract domestic and foreign investment.

In 1999, there were 43 million people working in about 3000 FTZs spanning

116 countries producing clothes, shoes, sneakers, electronics, and toys. The basic objectives of EPZs are to

enhance foreign exchange earnings, develop export-oriented industries and to generate employment

opportunities.

Contents

 [hide]

1 Criticism

2 List of Free Trade

Zones

3 See also

4 References

[edit]Criticism
Free trade zones are domestically criticized for encouraging businesses to set up operations under the influence

of other governments, and for giving foreign corporations more economic liberty than is given indigenous

employers who face large and sometimes insurmountable "regulatory" hurdles in developing nations. However,

many countries are increasingly allowing local entrepreneurs to locate inside FTZs in order to access export-

based incentives. Because the multinational corporation is able to choose between a wide range of

underdeveloped or depressed nations in setting up overseas factories, and most of these countries do not have

limited governments, bidding wars (or 'races to the bottom') sometimes erupt between competing governments.

Sometimes the domestic government pays part of the initial cost of factory setup, loosens environmental

protections and rules regarding negligence and the treatment of workers, and promises not to ask payment of

taxes for the next few years. When the taxation-free years are over, the corporation that set up the factory

without fully assuming its costs is often able to set up operations elsewhere for less expense than the taxes to be

paid, giving it leverage to take the host government to the bargaining table with more demands, but parent

companies in the United States are rarely held accountable.[4]

The widespread use of free trade zones by companies such as Nike has received criticism from numerous

writers such as Naomi Klein in her book No Logo

Export Processing Zones in Indiawas set up by the government of India with the aim to initiate infrastructural
development and tax holidays in various industrial sectors in the country. EPZ has incessantly accelerated the
economic growth of the country by ensuring a flourishing export production.

The export processing zones in India came into existence soon after the political independence, when India proclaimed
the first Industrial Policy Revolution in the year 1948. It was from then that the actual industrial growth begun in
India, which resulted in the constitution of the export processing zones later. Export promotion has always been the
chief concern of the government of India and it strictly follows the ISI policy while carrying out all its activities. The
main reasons behind setting up the EPZ in India have been listed as under: 

 Ensuring better infrastructural facilities in the industrial units that were set up in the export processing zones
in India
 Introducing the privilege of tax holidays
 Establishing 100 percent export-oriented system in the EPZ in India
 EPZ in India are entirely devoid of all kinds of duties, levies, and taxes
 Implementing tax holidays in the importing of goods like capital goods, raw materials, and consumer goods
as well.
 The units in export processing zones follow the automatic route set by the government of India which offers
100 percent foreign direct investment in the zone
 The rules set by the government of India are executed and implemented by the development commissioner
of the respective export processing zones in India

Some of the significant features of the Export Processing Zones in India have been enumerated as under:

 The activities that are carried out in the EPZ in India are not liable to be licensed apart from the IT enabled
sectors
 The units set up in the export processing zones in India can select their desired locations by following certain
parameters as prescribed by the state governments
 The export processing zones in India religiously follows the active export-import policy
 The units in EPZ in India are totally custom bonded
 The proposals for the units in Export processing zones in India are entitled to follow the automatic route for
approval as enforced by the state governments
 The proposals which do not fall under the procedure of automatic route system are governed or approved by
the FIPB
 The activities in EPZ in India belonging to the Domestic Tariff Area sector are converted into Export oriented
units to meet the parameters set for the export production by the government
 100 percent FDI is granted to these zones
Some of the most eminent free-trade and Export Processing Zones in India and their contact details have been listed
below: 

Santa Cruz Electronics Export Processing Zone

http://www.seepz.com/ 
Andheri (East)
Mumbai 400 096, India
Tel: 91-22-836 7143
Fax: 91-22-832 1169 

Falta Export Processing Zone

http://www.fepz.com/ 
2nd MSO Building
4th Floor, Room No. 4, Nizam Palace
234/4, A J C Bose Road
Calcutta 700 020, India
Tel: 91-22-247 7923
Fax: 91-33-247 2263 

Cochin Export Processing Zone

http://www.cepz.com/ 
CPZ Administrative Building
Kakkanad, Cochin 682 030, India
Tel: 91-484-422 530, 422 551
Fax: 91-484-422 530 

Noida Export Processing Zone

http://www.busdir.com/business/nepz
PHD House, 3rd Floor
Khel Gaon Marg, 

New Delhi 110 016, India

Tel: 91-11-685 5061
Fax: 91-11-685 5061 

Kandla Free Trade Zone

Ghandhidham
Kutch 370 230, India
Tel: 91-2836-521 94
Fax: 91-2836-522 50 

Madras Export Processing Zone

http://www.mepz.com/ 
Administrative Building
GST Road, Tambaram
Chennai 600 045, India
Tel: 91-44-236 8220
Fax: 91-44-236 8218 

Visakhapatnam Export Processing Zone

http://ns.stph.net/vepz 
Udyog Bhavan Complex, 
Shripuram Junction
Visakhapatnam 530 003, India
Tel: 91-891-551 259, 554 577
Fax: 91-891-551 259