The Indian government has established unique free trade areas around the country with the main objective of attracting foreign direct investment (FDI) to the country and, thus, stimulating the economy. The unique free trade areas are called Special Economic Zones (SEZ) that are treated as duty-free foreign territory for all trading activities.
Foreign investors and business owners who set up in such free trade zones are provided with various fiscal and non-fiscal incentives free trade zone benefits and relevant support. The SEZs are subjected to the Special Economic Zones Act of 2005 passed by the Indian government. These can be established by the Central and the State governments. Besides, the private sector can also establish SEZs by submitting a proposal to the Indian board of approval as per the SEZ Rules of 2006. India Free Trade Zones are called "Special Economic Zones" (SEZs). Presently, there are 265 SEZs operational in India spread across the country . Approximately 150 more such free trade zones are in the process of being established according to the news. The Indian government had long used export processing zones (EPZs) to promote exports. Asia’s first EPZ was established in 1965 at Kandla, Gujarat state. While these EPZs had a similar structure to SEZs, the government began to establish SEZs in 2000 under the Foreign Trade Policy. This approach aimed to address issues arising from numerous regulatory controls, inadequate infrastructure, and an unreliable fiscal system, and to allure higher foreign investments from international businesses and MNCs to India. The SEZ category encompasses various zone types, such as free trade zones (FTZs), EPZs, industrial estates (IEs), free ports, free trade warehousing zones (FTWZz), and urban enterprise zones, among others.
Some incentives for setting up a sourcing or manufacturing platform within an Indian SEZ include Duty-free import and domestic procurement of goods for the development, operation, and maintenance of your company / SEZ unit 100 percent income tax exemption on export income for SEZ units under Section 10AA of the Income Tax Act for first five years, 50 percent for the next five years thereafter and 50 percent of the plowed back export profit for the next five years.
SEZs set up by Govt. of India
- Kandla and Surat (Gujarat) http://kasez.gov.in
- SEEPZ (Maharashtra) http://seepz.gov.in
- MEPZ (Tamil Nadu) http://www.mepz.gov.in
- Noida (Uttar Pradesh) https://www.nsez.gov.in
- Cochin (Kerala) http://www.csez.com/
- Falta (West Bengal) http://fsez.gov.in
- Vishakhapatnam (Andhra Pradesh) http://www.vsez.gov.in
Popular India free trade zones:
Kandla Special Economic Zone(KASEZ):
Established in 1965, the first SEZ was set up in India and Asia located on the Gulf of Kutch in Gujrat.
Businesses are provided with well-developed infrastructure, facilities, and more for their office.
It is well-connected to the world through its seaports namely the Kandla port and the Adani port Mundhra.
It is a multi-product type of SEZ and any business can be established in this region.
Noida Special Economic Zone (NSEZ):
Spread across 125 hectares, the Noida Special Economic Zone was established in 1985.
* This Zone offers businesses with well-developed infrastructures and facilities, a strong telecommunication network, an efficient transportation system, and more.
* Located in Noida, NSEZ is one of the many landlocked SEZ areas in India as opposed to others which are usually located on the ports. For this reason, it is ideal for low-volume and skill-intensive commerce products such as those found in the Accessories and Electronics Industry.
Falta Special Economic Zone (FEPZ):
Established in 1984 as an Export Processing Zone, the Falta Economic Zone now falls under the policy of the SEZ Act of 2005.
It is well-connected to the world with access to an extensive network of roads, two ports in Kolkata and Haldia, and an international airport at Dumdum.
* It also has well-established infrastructures with industrial sheds, factory buildings, trade and export incentives, telecommunication networks, and utilities.
Updated on: Wednesday, May 15th,2024