PROJECT REPORT

ON ROLE OF SEZ'S & EPZ'S in ECONOMIC GROWTH OF A COUNTRY LIKE INDIA

TEAM PROJECT TERM - 2 SECTION - B

BUSINESS ENVIRONMENT AND POLICY

SUBMITTED TO: DR. RAJEEV MATHEW

Submitted By:

1.Aakanchha - 2022001

2.Abhishek Kumar pandey-

3.Advit Kabra-

4.Aman Rao- 2022011

5.Aman Sharma-

Group 1

CERTIFICATE FROM INTERNAL GUIDE

This is to certify that the report titled “ROLE OF SEZ'S & EPZ'S in ECONOMIC GROWTH OF A COUNTRY
LIKE INDIA” is an academic work done by “GROUP 1” submitted in the partial fulfillment of requirement
of PGDM program at Jaipuria School of Business under my guidance & direction. To the best of my
knowledge and belief the data & information presented by them in the project has not been submitted
earlier.

Signature:

Dr. RAJEEV MATHEW

 ACKNOWLEDGEMENT

This report has been with the cooperation of many persons whom we wish to express our gratitude and
appreciation. We are very grateful to the people who supported us to transform the report in the
materialistic form. I am immensely grateful and express my gratitude to Dr. Rajeev Mathew for granting
me the permission and undertaking this project. Heartiest thanks to our group members, for continuous
cooperation and understanding.

Aakanchha

Abhishek Kumar Pandey

Advit kabra

Aman Rao

Aman sharma
INTRODUCTION

1. SEZ - A special economic zone (SEZ) is an area in which the business and trade
laws are different from the rest of the country. SEZs are located within a country's
national borders, and their aims include increasing trade balance, employment,
increased investment, job creation and effective administration.

To encourage businesses to set up in the zone, financial policies are introduced.

These policies typically encompass investing, taxation, trading, quotas, customs
and labour regulations. Additionally, companies may be offered tax holidays,
where upon establishing themselves in a zone, they are granted a period of lower
taxation.

The creation of special economic zones by the host country may be motivated by
the desire to attract foreign direct investment (FDI).The benefits a company gains
by being in a special economic zone may mean that it can produce and trade
goods at a lower price, aimed at being globally competitive.

In some countries, the zones have been criticized for being little more than labor
camps, with workers denied fundamental labor rights.

This policy intended to make SEZs an engine for economic growth supported by
quality infrastructure complemented by an attractive fiscal package, both at the
Centre and the State level, with the minimum possible regulations.
SEZ in India

• India was one of the first in Asia to recognize the effectiveness of the Export
Processing Zone (EPZ) model in promoting exports, with Asia’s first EPZ set
up in Kandla in 1965.

The SEZ Rules provide for:

 Simplified measures for the development, operation, and maintenance of

the Special Economic Zones and for setting up plants and doing business in
SEZs

 Single window clearance for setting up an SEZ

 Single window clearance for setting up a plant or business in a Special

Economic Zone

 Single Window clearance on matters relating to Central as well as State

Governments

 Simplified agreement procedures and documentation with an emphasis on

self-certification

Advantages of SEZ

• Allowed to carry forward losses.

• No licence requires for import made under SEZ units.

• Duty free Import or domestic procurement of goods for setting up of the

SEZ units.

• No routine examination by customs officials of export and import cargo.

 • Exemption from payment of Service Tax.

Disadvantages of SEZ

• The biggest drawback is that the SEZ takes up the arable land from the
farmers to set up its business activities

• Due to the consumption of the arable land, there will be low crop
production, resulting in decreased economic growth and reduces GDP.

• Revenue losses because of the various tax exemption and incentives.

• Many traders are interested in SEZ, so that they can acquire at cheap rates
and create a land bank for themselves.

Objectives of setting SEZ in India

• Generating of additional economic activity.

• Promoting of exports of goods and services.

• Promotion of investment from domestic and foreign sources.

• Creation of employment

• Development of Infrastructure

• Single window clearance on matters relating to Central as well as State

Government.
Positive Impacts of SEZ

• Promote FDI

• Boost Economic Growth and Exports

• Infrastructure Development

• Generate Local Employment Opportunities

• Growth opportunities for tier-2 cities

• Ease of Procedure to start business

• Duty free Imports and tax exemptions.

Types of SEZ

• Free Trade Zones (FTZ): A free trade zone is any location where goods can
be shipped, handled, manufactured, reconfigured and re-exported without
the involvement of customs agencies. A major seaport, an international
airport or a border facility between two or more countries may be
designated a free trade zone.

• Export Processing Zones (EPZ): An Export Processing Zone (EPZ) is a

customs area where one is allowed to import plant, machinery, equipment
and material for the manufacture of export goods under security, without
payment of duty.

• Free Economic Zones (FZ/ FEZ): Free economic zones (FEZ), or free zones
(FZ) are a class of special economic zone (SEZ) designated by the trade and
commerce administrations of various countries. The term is used to
 designate areas in which companies are taxed very lightly or not at all to
encourage economic activity.

• Free Ports: Freeports are a special kind of port where normal tax and
customs rules do not apply. These can be airports as well as seaports. At a
freeport, imports can enter with simplified customs documentation and
without paying tariffs.

• Bonded Logistics Parks (BLP): A bonded logistics park is a type of special

economic zone. Trade arrangements are similar to that of a bonded
warehouse but over a specific geographic area. Sometimes with
international port capabilities. Goods may be stored, manipulated, or
undergo manufacturing operations without payment of duty.

• Urban Enterprise Zones: An urban enterprise zone is an area in which

policies to encourage economic growth and development are
implemented. Urban enterprise zone policies generally offer tax
concessions, infrastructure incentives, and reduced regulations to attract
investments and private companies into the zones.

Administration of SEZ

• Development Commissioner

• 2 Officers of Central Government

• 2 Officers of Central Government dealing with Revenue

• 1 Officer of Central Government dealing with Economy/Finance

• 2 Officers of the State Government

• Nominee of the Developer

Export Processing Zones (EPZs)

An export processing zone, or EPZ, is an area set up to enhance commercial and

industrial exports by encouraging economic growth through investment from
foreign entities. Incentives such as tax exemptions and a barrier-free environment
are the main attractions of an EPZ.

EPZs also play an important role in the economic development of a country by

providing employment opportunities and contributing to foreign exchange
earnings.

Export Processing zones are first seen in Singapore and Hong Kong in 1930s to
encourage foreign investment in the country.

Companies based in an EPZ tend to benefit from tax concessions that are
generally long-term in nature.

While parts of countries that do not contain EPZs can remain underdeveloped in
terms of technology and infrastructure, EPZs are fitted with advanced
communication facilities and enhanced infrastructure.

Companies do not require as much government approval for practices as firms

outside of the zone, with labor laws being more flexible.

The first EPZ in Asia was established in 1965 in the Export Processing Zone of
Kandla in Gujarat

India was one of the first (in Asia) to recognize the effectiveness of the Export
Processing Zone (EPZ) model in promoting exports, with Asia's first EPZ set up in
Kandla in 1965. With a view to overcoming the shortcomings experienced on
account of the diversity of controls and clearances; absence of world-class
infrastructure, and an unstable fiscal regime, and with a view to attracting larger
foreign investments in India, the Special Economic Zones (SEZs) Policy was
announced in April 2000.
Recent news/events on EPZs

The Commerce Ministry has sought a Central Bureau Investigation (CBI) probe
into irregularities committed by Santacruz Electronics Export Processing Zone
(SEEPZ) authority in giving ₹74.85 crore worth construction related contract to a
company without open bidding in 2017. (Business Standard)

Mega Common Facility Centre (CFC) Project at the Santacruz Electronics Export
Processing Zone (SEEPZ) in Mumbai must be completed within stipulated time
and set an example for such projects: Shri Piyush Goyal. Upcoming Mega CFC will
boost global competitiveness of the Gems and Jewellery Sector- Shri Piyush Goyal.
CFC to help Small and Medium Enterprises improve efficiency and help them
move up the value chain: Shri Goyal (1 Sept 2022, Economic Times)
As of December 2022, Seven EPZs are operating in India.