Day 62: Special Economic Zones (SEZs) & Export Promotion Zones (EPZs)

By /

Special Economic Zones (SEZs) and Export Promotion Zones (EPZs) are critical for boosting exports by providing businesses with regulatory, financial, and infrastructural advantages. This session explores setting up a unit in SEZs/EPZs, types of SEZs in India, regulatory frameworks, incentives, and successful examples.

1. How to Set Up a Business Unit in an SEZ/EPZ?

Steps to Set Up a Unit:

  1. Select an SEZ/EPZ Location:
    • Choose based on proximity to resources, infrastructure, and target markets.
    • Example: A software exporter selects an SEZ in Bengaluru for its IT ecosystem.
  2. Obtain SEZ Approval:
    • Submit an application to the Development Commissioner of the SEZ.
  3. Register Your Business:
    • Complete company registration as per Indian legal requirements.
  4. Prepare a Project Proposal:
    • Include details of the business, investment, employment generation, and export potential.
  5. Sign the Agreement:
    • Enter into an agreement with the SEZ authority, outlining responsibilities and benefits.

Requirements:

  • Financial viability assessment.
  • Adherence to SEZ rules and guidelines.
  • Regular reporting of exports and employment metrics.

2. What Are the Types of SEZs in India?

Categories of SEZs:

  1. Sector-Specific SEZs:
    • Focused on industries like IT, textiles, or pharmaceuticals.
    • Example: The Hyderabad IT/ITES SEZ.
  2. Multi-Product SEZs:
    • Accommodate diverse industries within a single zone.
    • Example: Mundra SEZ in Gujarat.
  3. Free Trade Warehousing Zones (FTWZs):
    • Focus on warehousing, logistics, and supply chain management.
    • Example: Arshiya International FTWZ, Mumbai.
  4. Port-Based SEZs:
    • Located near ports to facilitate import/export operations.
    • Example: Adani Port SEZ, Gujarat.

3. What Is the Regulatory Framework and Incentives Offered by SEZs/EPZs?

Regulatory Framework:

  1. SEZ Act, 2005:
    • Governs the establishment and operation of SEZs in India.
  2. Key Authorities:
    • Ministry of Commerce, Development Commissioners, and SEZ Boards.

Incentives for Businesses:

  1. Tax Benefits:
    • 100% income tax exemption on export income for the first 5 years.
    • Exemptions from GST, customs, and excise duties.
  2. Simplified Procedures:
    • Single-window clearance for approvals.
  3. Infrastructure Support:
    • State-of-the-art facilities, power supply, and connectivity.
  4. Export Subsidies:
    • Access to government export promotion schemes.
  5. Other Benefits:
    • Duty-free imports of capital goods, raw materials, and consumables.

4. What Are the Infrastructure and Logistical Advantages of SEZs/EPZs?

Key Infrastructure Advantages:

  1. Integrated Facilities:
    • Includes industrial parks, warehousing, and transportation hubs.
  2. Efficient Utilities:
    • Reliable power, water, and IT infrastructure.
  3. Connectivity:
    • Proximity to ports, airports, and major highways ensures seamless logistics.
  4. Customs and Clearance:
    • On-site customs offices for faster processing of shipments.

Logistical Advantages:

  1. Lower Transportation Costs:
    • Reduced freight costs due to strategic locations.
  2. Efficient Supply Chains:
    • Better collaboration with logistics providers within the SEZ.
  3. Streamlined Operations:
    • Minimized delays in import/export processes.

5. Examples of Successful SEZ/EPZ Units in India

Case Studies:

  1. Infosys SEZ, Bengaluru:
    • Focuses on IT and software exports, generating significant employment and revenue.
  2. Mundra SEZ, Gujarat:
    • One of India’s largest multi-product SEZs, supporting industries like textiles, chemicals, and food processing.
  3. Sri City SEZ, Andhra Pradesh:
    • Houses diverse industries, including automotive, electronics, and FMCG, with a strong export focus.
  4. Kandla SEZ, Gujarat:
    • India’s first SEZ, known for exporting textiles, chemicals, and engineering goods.
  5. Chennai FTWZ:
    • A free trade warehousing zone that supports exporters with storage and logistics solutions.

Practical Tips for Businesses Considering SEZ/EPZ:

  • Engage with export promotion councils for advice on SEZ benefits.
  • Conduct a cost-benefit analysis to ensure profitability in an SEZ environment.
  • Regularly review SEZ policies to leverage new incentives or schemes.

Caution Disclaimer

“For further in-depth details, importers/exporters are advised to visit authenticated government websites such as SEZ India, DGFT, or other official platforms to ensure compliance and accuracy. The content provided here is for educational purposes only and is not intended to substitute official guidelines or advice. Tradefinancer.com does not assume liability for any discrepancies or errors that may arise.”

In-House Training

“For in-house training, either online or offline, please contact us at contact@tradefinancer.com.”

error: Content is protected !!
Scroll to Top