Presented By

Ashish Kumar_04
Grisma Gupta_08
Kalai Selvan_12
A Special Economic Zone (SEZ) is a geographical region that has economic and other
laws that are more free-market-oriented than a country's typical or national laws.
"Nationwide" laws may be suspended inside a special economic zone

SEZ units may be set-up for the manufacture of goods, provisioning of services,

and other activities including
processing, assembling, trading, repairing, reconditioning, making of
gold/silver, platinum jewellery 

The Policy allows 100 per cent foreign direct investment ("FDI") in manufacturing
activities
 History of Special Economic Zones
From 1965 onwards, India experimented with the concept of such units in the
form of Export Processing Zones (EPZ).

•Kandla ( Gujarat) : 1965 (625 Acres)

•Seepz( Maharashtra) : 1975 (110 Acres)
•Noida (U P) : 1986 (310 Acres)
•Madras ( T N) : 1986 (262 Acres)

•Cochin ( Kerala ) : 1986 (103 Acres)

•Falta ( W B) : 1986 (280 Acres)
•Visakhapatnam( AP) : 1994 (360 Acres)
•Surat ( Gujarat ) : 1998 (103 Acres)

•But a revolution came in 2000, when Murlisone Maran, then Commerce

Minister, made a tour to the southern provinces of China. After returning from
the visit, he incorporated the SEZs into the Exim Policy of India. Five year later,
SEZ Act (2005) was also introduced and in 2006 SEZ Rules were formulated.
Who can set up an SEZ ?

An SEZ can be set up by

Private & Public

Central Govt State Govt
Company
Jointly By any of
these

Stages of ●

●
In Principal Approval
Formal Approval
Approval ●
Notified SEZs
MINIMUM AREA REQUIREMENTS FOR SETTING UP A SEZ ARE AS
FOLLOWS:

Multi Sector SEZ : 1000 hectares

Sector Specific SEZ : 100 hectares

FTWZ : 40 hectares

IT/ITES/handicrafts SEZ Bio-technology/ : 10 hectares

non-conventional energy/gems and jewellery Sector
 BENEFITS ENJOYED BY SEZS

• Freedom to make overseas

investment

• Insurance outside India allowed

• Capitalisation of import payables

• Commodity hedging permitted.

• Foreign cos permitted to set up

branches for manufacturing activities
• No license required for import.

• In addition to manufacturing, trading

and services also allowed

• Freedom to subcontract.

• Single window approval by

Development Commissioner of the
zone.
Exemption of Tax

Service Tax Import duty

Income tax holiday Excise duty

Capital gain VAT

Dividend Distribution Tax Customs Duties

Securities Transaction Tax

 Exit of Units
• The SEZ Unit may opt out of Special Economic Zone with
the approval of the Development Commissioner
• Such exit shall be subject to payment of applicable duties on
the imported or indigenous capital goods, raw materials,
components, consumables , spares and finished goods in stock
• If the unit has not achieved positive Net Foreign Exchange,
the exit shall be subject to penalty that may be imposed under
the Foreign Trade (Development and Regulation), Act, 1992
• The Unit shall continue to be treated a unit till the date of final
exit.(Rule 74 of Special Economic Zones, 2006)
 Monitoring of performance

• Performance of the Unit shall be monitored by the

Approval Committee as per the guidelines given in
Annexure appended to the rules.
• In case the Approval Committee come to the conclusion
that a Unit has not
 achieved positive Net Foreign Exchange Earning
 failed to abide by any of the terms and conditions of the
Letter of Approval or Bond-cum-Legal Undertaking
The said Unit shall be liable for penal action under the
provisions of the Foreign Trade (Development and
Regulation) Act, 1992 ( Rule 54 of SEZ Rules 2006)
EXPORT PERFORMANCES

Year Value (Rs. Crore) Growth Rate ( over previous year )

2003-2004 13,854 39%

2004-2005 18,314 32%

2005-2006 22 840 25%

2006-20007 34,615 52%

2007-2008 66,638 93%

2008-2009 99,689 50%

2009-2010 2,20,711.39 121.40%

Issue China India
Size Typically in hundreds of Even 10 hectares will do
hectares.

Location located only on coasts. Anywhere. No restriction

Labour laws Relaxed Flexibility is totally absent

Policy regime Experimentation of liberal Based on fiscal sops

policies in the specified areas

Investors Basically foreigners who are Basically locals. Not foreign investor
wooed with sops and promise driven
of stability in policy.

Commencement In 1979 In 1969 with the export processing

zone concept,but failed

Number Only six: Shenzhen, Zhuhai, So far 28 operational. About 200

Shantou, Xiamen, Hainan and received approvals
Pudong

Tax holidays Present Longer and steeper than in China

Source
http://sezindia.nic.in
www.sezonline-ndml.com