Free Trade Warehousing Zone (FTWZ)

Contents
Free Trade Warehousing Zone (FTWZ)......................................................................................................2

1. Introduction...................................................................................................................................2

2. Facilities provided in FTWZ.........................................................................................................2

3. Benefits...........................................................................................................................................2

4. Requirements to setup FTWZ......................................................................................................3

5. Approval Procedure......................................................................................................................4

6. Upcoming FTWZ’s........................................................................................................................4

6.1 Formal Approvals......................................................................................................................4

6.2 In-principle Approvals..............................................................................................................5

Free Trade Warehousing Zone (FTWZ)

1. Introduction
The Government of India (GoI) had announced in the Foreign Trade Policy 2004-09 to set up
Free Trade and Warehousing Zones (FTWZ) to create trade related infrastructure, to facilitate the
import and export of goods and services with freedom to carry out trade transactions in free
currency. On June 23, 2005, the Parliament of India passed the Special Economic Zones Act
2005 and on February 10, 2006 Government of India notified Special Economic Zones Rules
2006. The Free Trade and Warehousing Zones (FTWZ) is a special category of Special
Economic Zone and is governed by the provisions of the SEZ Act and the Rules. FTWZ is a
'Sanitized Zone' designated as Foreign Territory for carrying on business. FTWZ's are envisaged
to be Integrated Zones & to be used as 'International Trading Hubs'. Each Zone would provide
'World Class' Infrastructure for:

 Warehousing for various kinds of products

 Handling and Transportation Equipment
 Commercial office space
 All related utilities - telecom, power, water, etc
 One stop clearance of Import and Export of goods

2. Facilities provided in FTWZ

Basic infrastructure facilities like power, water, and sewerage drainage system will be provided
to the FTWZ users. The customs office will be placed inside the FTWZ with customs clearance
facility available to FTWZ users all round the clock. The FTWZs are also expected to provide
freight services to the FTWZ users in terms of transportation means to and from the Zone. The
FTWZ would also make available general facilities for effective storage and movement of cargo
through equipments such as counter balance fork-lifts, cranes and grabs, stackers, push carts,
picking trolleys and bins, shelves and storage bins, strapping and electronic scales.
Manufacturing facilities will not be allowed within the FTWZ. However, activities such as
packing, de-stuffing, knitting, splitting and other activities required for storage purposes will be
allowed within the FTWZ.

Support facilities such as banking, insurance etc. would be available for captive utilization within
the FTWZ. With customs clearance procedures being simplified, the delivery time would be
significantly reduced. FTWZ would provide users storage facilities that would meet the specific
requirements of each product category, thereby ensuring a safer and more efficient environment
for the storage of the products. FTWZ would be a key Link in Logistic and Global Supply chains
- servicing both India and the Globe.

The benefits that the user or developer of FTWZ enjoys are the following:

3. Benefits
Fiscal Benefits
Income tax (section 80IA) and Service Tax exemptions for developers and users of the zone ~
reduces logistics costs for users of the zone.
Duty Deferment Benefits: Custom Duty deferment benefits for products requiring longer storage
time.
Excise Duty Exemptions: Excise duty exemption for products sourced from the domestic
markets, including goods, spares, DG sets, packing materials, etc.

Infrastructure Benefits
Single Product Storage Facilities: Assist in meeting specific warehousing requirement for each
product category e.g. different sections for storage of tea and coffee, etc.
Shared warehousing: Availability of temporary storage facilities to enable users to meet short
term demand without incurring significant costs (e.g. leasing space for a year to meet 2/3 months
demand)
Shared Equipments: Ability of users to save on capital investments by leasing equipments
provided by the zone.

Administration Benefits
Delivery Time: Reduction in custom clearance time and better logistics connectivity leading to
improved delivery time.
Support Facilities and Effective Management: Provision of efficient management services and
international expertise along with support facilities such as banking, insurance etc.

4. Requirements to setup FTWZ

Special Economic Zone for Free Trade and Warehousing shall have an area of forty hectares or
more with a built up area of not less than one lakh square meters if the Free Trade and
warehousing Zones (FTWZ) is set up as part of a Special Economic Zone for multi-products.

If the special Economic Zone is for a specific sector, Free Trade and Warehousing Zone may be
permitted with no minimum area requirement but subject to the condition that the maximum area
of such Free Trade and Warehousing Zone shall not exceed twenty per cent of the processing
area.

The processing area and Free Trade and Warehousing Zone (FTWZ) shall be fully secured by
boundary wall or wire mesh fencing having a height of at least two meters and forty centimeters
above plinth level with top sixty centimeters being barbed wire fencing with mild steel angle
with specified entry and exit points.

The State Government shall, while recommending a proposal for setting up of Special Economic
Zone to the Board indicate whether the proposed area falls under reserved or ecologically fragile
area as may be specified by the concerned authority.

The Units in Free Trade and Warehousing Zones or units in Free Trade and Warehousing Zone
(FTWZ) set up in other Special Economic Zone, shall be allowed to hold the goods on account of
the foreign supplier for dispatches as per the owner’s instructions and shall be allowed for
trading with or without labeling, packing or re-packing without any processing provided that
refrigeration for the purpose of storage and assembly of Completely Knocked Down or Semi
Knocked Down kits shall also be allowed by the Free Trade and Warehousing units undertaking
the said activities.

A proposal for setting up of a Unit in a Special Economic Zone or Free Trade Warehousing
Zone shall be entertained only after the processing area of the Special Economic Zone or Free
Trade Warehousing Zone has been demarcated under rule 11.

Letter of Approval shall be valid for one year within which period the Unit shall commence
production or service or trading or Free Trade and Warehousing activity and the Unit shall
intimate date of commencement of production or activity to Development Commissioner.

Letter of Approval shall be valid for five years from the date of commencement of production or
service activity and it shall be construed as a license for all purposes related to authorized
operations, and, after the completion of five years from the date of commencement of
production, the Development Commissioner may, at the request of the Unit, extend validity of
the Letter of Approval for a further period of five years at a time.

5. Approval Procedure
Step 1: Application to Board of Approvals (BoA) / State Government to set up FTWZ in Form A
format.
Step 2: State Government recommends / forwards the proposal to the Board of Approvals (BoA)
along with recommendations.
Step 3: Board approves with or without modifications / rejects the proposal. May also accord in-
Principle approval pending land acquisition.
Step 4: Issuance of Letter of Approval (LOA) by Government of India (GoI) in Form B format.
LOA validity 3 years during which time Developer shall take effective steps to implement the
approved proposal.

6. Upcoming FTWZ’s
6.1 Formal Approvals

Name of the Developer: Balaji Infra Projects Limited (BIPL)

Location: Dighi Port, District Raigadh, Maharashtra
State: Maharashtra
Type: FTWZ
Area: 100 Hectares

Name of the Developer: Chiplun Infrastructure Private Limited (formerly M/s FTWZ Ltd.)
Location: Mumbai, Maharashtra
State: Maharashtra
Type: FTWZ
Area: 40 Hectares
Name of the Developer: J. Matadee Eco Parks Pvt. Ltd.
Location: Mannur Village, Sriperumbudur Taluk, Kancheepuram Distt., Tamil Nadu
State: Tamil Nadu
Type: FTWZ
Area: 40 Hectares

Name of the Developer: Jafza Chennai Business Parks Private Limited

Location: Vallur Village, Ponneri Taluka, Tirvallur District, Tamil Nadu
State: Tamil Nadu
Type: FTWZ
Area: 136.38 Hectares

Name of the Developer: Jhunjhunwala Vanaspati Ltd.

Location: Sahupuri, Distt. Chandauli, Uttar Pradesh
State: Uttar Pradesh
Type: Multi-services SEZ with FTWZ and 25 MW Captive Power Plants
Area: 103.63 Hectares

Name of the Developer: Haldia Free Trade Warehousing Private Limited

Location: Haldia, West Bengal
State: West Bengal
Type: FTWZ
Area: 45.72 Hectares

6.2 In-principle Approvals

Name of the Developer: LMJ Warehousing Private Limited
Location: Kandla, Gujarat
State: Gujarat
Type: FTWZ
Area: 40 Hectares

Name of the Developer: Shipco Infrastructure Private Limited (SIPL)

Location: Karnataka
State: Karnataka
Type: FTWZ
Area: 120 Hectares

Name of the Developer: Arshhiya Technologies International Limited (AIL)

Location: Village SAI, Taluka - Panvel, Maharashtra
State: Maharashtra
Type: FTWZ Hectares
Area: 68 Hectares

Name of the Developer: Vibrant IL&FS Consortium

Location: Naigaon, Maharashtra
State: Maharashtra
Type: FTWZ
Area: 46.94 Hectares

Name of the Developer: DLF Universal Limited

Location: Amritsar, Punjab
State: Punjab
Type: FTWZ
Area: 40 Hectares

Name of the Developer: Greater Noida Integrated Warehousing Pvt. Ltd. (Earlier known as Free
Trade Warehousing Zone Pvt. Ltd. (FTWPL)
Location: Greater Noida, Uttar Pradesh
State: Uttar Pradesh
Type: FTWZ
Area: 80 Hectares